Helvetia with a solid result in the area of occupational pension plans and measures aimed at securing full insurance Donnerstag, 16. Mai 2019 - 07:00

Media release

Basel, 16 May 2019

In 2018, Helvetia Insurance generated a solid result in the area of occupational pension plans in Switzerland. Due to the unrealistic parameters in the second pillar, Helvetia is making changes to the structure of the pension solution so that it can continue to offer a comprehensive range of products.

In its business with occupational pension plans in Switzerland, Helvetia Insurance generated a premium volume of CHF 2,624 million in 2018, representing an increase of 2% on the previous year (2017 premiums: CHF 2,564 million). The regular premiums increased considerably by 4% to CHF 1,269 million. Growth of 0.9% to CHF 1,355 million was recorded for single premiums.

Stable policyholder dividend

In the business subject to the minimum distribution ratio, Helvetia provided benefits to policyholders in the amount of CHF 517.2 million, which equates to a distribution ratio of 90.5%. The operating result stood at CHF 54.1 million and was thus 6% lower than in the previous year (2017: CHF 57.8 million). The distribution ratio for the business not subject to the minimum distribution ratio stood at 92.8%.

With respect to the policyholder dividends paid to its policyholders, Helvetia once again placed an emphasis on continuity and stability. In the business subject to the minimum distribution ratio, the compulsory LOB insurance assets earned the minimum interest rate of 1%, while 0.75% was paid on the non-mandatory assets. A risk surplus was also distributed.

The operating expenses per active policyholder remained almost unchanged at CHF 477 (2017: CHF 479). Overall all, operating expenses increased by CHF 3.7 million or 4% to CHF 103.4 million. The net performance calculated on the basis of market values was just in positive territory at 0.04%. Alongside developments on the equity markets, increased spreads on corporate bonds, in particular, were responsible for this deterioration relative to 2017.

The number of group contracts remained unchanged at 17,498. Meanwhile, the number of policyholders increased by 4% to 234,599. In light of the unrealistic framework conditions with a greatly excessive conversion ratio for compulsory LOB insurance, Helvetia is continuing to adopt a restrictive underwriting policy.

Helvetia utilising own room for manoeuvre

Due to these framework conditions, the unfair and extraneous redistribution from active policyholders to pension recipients remains high. Last year, more than CHF 160 million was redistributed as shown by Helvetia calculations. In order to reduce this figure and at the same time allow it to continue offering a comprehensive range of products with full insurance and semi-autonomous collective foundations, Helvetia has decided to make use of its own room for manoeuvre. For example, Helvetia has developed measures to enable it to still offer stable and secure benefits as well as needs-oriented and fair solutions. These measures include, for instance, a reduction in the conversion rate with a credit principle.

Reform of the second pillar remains essential and urgent

Despite the measures taken by Helvetia, there is no getting around the necessity of a reform to the second pillar, as Donald Desax, Head of Group Life Switzerland and member of the Executive Management of Helvetia, explains: "The second pillar finds itself in a systemic crisis due to demographic developments and low interest rates. In order to manage this crisis, a reduction in the LOB minimum conversion rate is absolutely essential. A contribution to the financing of pension conversion losses must also be introduced. An increase in old-age credits as a compensation measure should likewise secure the benefit level."

The 2018 operating statement for the occupational pension plans of Helvetia Switzerland can be found at www.helvetia.ch/facts-figures-lob.

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