Risk categories for insurance companies

FINMA assigns supervised institutions to one of five risk categories. The aim here is to ensure an appropriate level of supervision and to use the resources available efficiently.

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

FINMA assigns companies to a particular category based on their balance sheet total. Currently, there are insurance companies in risk categories 2 to 5.

Supervisory categories for insurance companies

Different levels of supervisory intensity

A company's risk potential determines which supervisory tools are used and the level of supervisory intensity: increased risks require more intensive 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 relevant audit area will be subject to more intensive supervision. By following a principle-based, risk-oriented approach to supervision, FINMA can ensure an appropriate level of supervision and use its resources efficiently.