Swiss groups' solvency levels fall in 2017, analysis finds

10 May 2018

Swiss insurer regulatory coverage ratios dropped last year to 244.1% from 249.3%, even though as many entities saw their ratios rise as fall.

Insurance Risk Data, the data service of InsuranceERM, analysed the newly released Swiss Financial Condition Reports (FCR) of 42 entities, at solo and group level.

The 244% from 2017 compared well to the 236% of insurers across the EEA, as measured by the European Insurance and Occupational Pensions Authority in mid-2017.

However, none of the entities Insurance Risk Data examined failed to meet the 100% adequacy point in 2017. Generali Personenversicherungen had to pull itself up from 104% at the start of 2017, though, and one of the EGK units rose from 107%.

The universe's coverage levels were generally stable year on year, though outliers included Zurich Reinsurance (808% in 2016 to 430% last year); Sympany Versicherungen (479% to 663%); Echo Rueck (254.9% to 198%); and Swica Versicherungen (152.9% to 227.8%).

Zurich Re's sharp fall came from its risk bearing capital falling from $432.1m to $409.9m, while its target capital rose steeply from $68.2m to $107m. It noted, however, that even the 2017 number was comfortably above the 100% adequacy threshold.

Others, such as Allianz Suisse Leben, Swiss Re Group, Deutsche Rueck Swiss and Swiss Re Corporate Solutions saw levels shift 10 or fewer percentage points last year.

Their FCRs all contained other data such as premiums, technical provisions and risk-bearing capital, though the reports were generally shorter than Solvency II's corresponding solvency and financial condition reports (SFCR).

Swiss regulator the Eidgenössische Finanzmarktaufsicht (Finma) has not yet published an industry average coverage ratio for Switzerland.

Finma is already reworking the form of data domestic insurers, and local subsidiaries of foreign groups, will have to provide it each year from 2020.

"This will make for a uniform data structure and reporting framework, and also for better transparency," it said, adding that the content of data will remain largely unchanged.

The reordering was "furthermore an important element by which the European Commission could adjudge Switzerland's insurance supervisory system as equivalent to Solvency II".

Figure 1: Swiss Insurers' SST Ratios (%). Source:Source: Companies' Financial Condition Reports, 2017, analysed by Insurance Risk Data. Data commonly as at 31 December 2017/2016.

As well as reporting under Swiss solvency rules, many Swiss underwriters report under Solvency II for their in-scope entities. All SFCR reports and associated quantitative reporting templates (QRTs) are available from InsuranceERM as part of a new insurance risk data service. This service combines European insurers' financial and regulatory filings, including the new Solvency II disclosures, into a single, comprehensive and user-friendly database ideal for market/peer analysis, research and benchmarking. To find out more please email [email protected]