Helvetia presents a gratifying result for occupational benefits

Helvetia Insurance presents a gratifying result for occupational benefits. Operating profit in 2021 came to CHF 81.1 million and was therefore 29% higher than in the previous year (2020: CHF 62.7 million). Thanks to a good year for investments in 2021, the result for the savings process was significantly improved. The risk and cost processes generated a cost-covering income. Helvetia used the good result in particular to strengthen its reserves for current and future pensions for its insured persons, as part of its sustainability approach.
 
In its occupational benefits business, Helvetia posted premium volume of CHF 1,943.6 million, which was around 6% lower than in the previous year (premiums in 2020: CHF 2,068.2 million). This decline is due in particular to the shift from full insurance to semi-autonomous solutions and the related decline in savings premiums. In 2021, premium volume in semi-autonomous solutions and the number of active insured persons both increased overall.
 
Steady and strong participation in surpluses
In its business subject to the minimum distribution ratio, Helvetia used a total of CHF 597.4 million to the benefit of insured persons in 2021, which equates to a payout ratio of 90.5% (2020: 90.6%).
 
Helvetia’s surplus policy of recent years has focused on continuity and stability. This consistent surplus policy and the good business result in 2021 allow appropriate sharing of surpluses. For business subject to the minimum distribution ratio, compulsory retirement savings under LOB earned the minimum rate of interest of 1%. Supplementary retirement savings attracted 0.75%. In accordance with the regulations for the minimum distribution ratio relating to the distribution of surpluses, a risk surplus was paid out for 2021 in addition to the interest surplus.
 
Operating expenses continue to decline
As in 2019 and 2020, in 2021 operating expenses declined by CHF 8.8 million year-on-year (9%) to CHF 89.1 million. Operating expenses per active insured person declined by 12% to CHF 418 (2020: CHF 477) and is therefore back to the 2019 level.
 
Net performance based on market values was 0.97% in 2021. The market values of equities and real estate performed well, thanks to the economic upturn and the good year on the stock markets. On the other hand, rising inflation and signs of the end of ultra-expansionary monetary policy depressed the market prices of fixed-rate bonds.
 
The number of insured persons rose by 3% to 229,840 (2020: 222,436), while the number of collective contracts declined by 1% to 17,086 (2020: 17,286).
 
Non-systemic redistribution still too high
A reform of the occupational benefits scheme remains urgent and essential. The non-systemic redistribution still too high. Anja Göing-Jaeschke, Head Actuarial Services Life Switzerland at Helvetia, explains: "Thanks to the positive gross result from the savings process for active insured persons, Helvetia was able to strengthen its reserves in 2021. Together with the reduction in the conversion rates due to the introduction of the new collective life tariff on 1 January 2020, it will be possible to limit cross-subsidization for the next few years. However, without an improvement in the legal framework, it will not be possible to avoid a certain degree of cross-subsidization in future.
 
Comprehensive security or higher interest rates
"Helvetia offers its customers in the Swiss collective life segment both models in line with their needs: the full insurance model with far-reaching guarantees and the semi-autonomous model with potential returns", explains Hedwig Ulmer, Head Pension Provisions and a member of Executive Management Switzerland at Helvetia.
 
The 2021 operating statement for Helvetia Switzerland’s occupational benefits business can be found at www.helvetia.ch/facts-figures-lob.