Risk categories for insurance companies

In order to ensure appropriate supervision and make the best use of limited resources, FINMA assigns supervised institutions to one of five risk categories.

Assignment to a supervisory category is based on the potential risks for creditors, investors, insured persons, the system as a whole and the good name of the Swiss financial centre. The categories range from 1 (extremely large, important, complex companies with very high risks) to 5 (low risk).

Assignment to categories

FINMA assigns companies to particular categories primarily on the basis of the total target amount in tied assets (for insurance companies) and net assets (for reinsurance companies). At present, there are insurance companies in risk categories 2 to 5.

Supervisory categories for insurance companies

Differing supervisory intensities

The risk potential of companies determines which supervisory tools are used and how intensively: the higher the risk, the more intensive the supervision. The key factors are the risk category and FINMA's own rating of the company. If the rating parameters within a category result in negative values for a company, the supervisory process for this company is intensified in the relevant area. In order to ensure appropriate supervision and make the best use of limited resources, FINMA takes a principles-based, risk-oriented approach.