Country Profile Switzerland www.lloyds.com/SwitzerlandMI
April 2014 filip.wuebbeler@lloyds.com
KEY FACTS FULL NAME / CAPITAL CITY: Swiss Confederation / Bern
GDP (PPP):
US$ 372bn (Global Rank #36)
LANGUAGE:
POPULATION:
8m (Global Rank #91)
IMF CATEGORISATION:
“Developed”
German, French, Italian, Romanisch
MAIN EXPORT PARTNERS:
Germany 20%, US 10%, Italy 8% (2011)
MAIN IMPORT PARTNERS:
Germany 32%, Italy 10%, France 9% (2011)
MAIN EXPORTS:
Machinery, chemicals, metals
MAIN IMPORTS:
Machinery, chemicals, vehicles
2012 Rank
2013 Rank
Change in Rank
EASE OF DOING BUSINESS:
26
28
-2
COMPETITIVENESS:
1
1
0
FREEDOM FROM CORRUPTION:
8
8
0
DISASTER
YEAR
ECONOMIC COST (US$ x 1000)
Flood
2005
2,100,000
Storm
1999
1,500,000
Storm
2009
1,000,000
Mass Movement
1999
685,000
Storm
1993
420,000
Source: Disaster Statistics based on: Prevention Web (2013); Export Statistics based on CIA World Factbook; Doing Business Indicators based on World Bank & World Economic Forum © Lloyd’s
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KEY STATISTICS Purchasing Power Parity (PPP) basis in International $
IE
Switzerland
Austria
Ireland
Government Effectiveness
98
93
92
Political Stability and Absence of Violence/Terrorism
98
96
77
Control of Corruption
98
89
90
Regulatory Quality
95
91
94
Rule of Law
97
98
94
2012
500 450 400 350 300 250 200 150 100 50 0
99
95
40,000
30,000 20,000 10,000 0 2006
Voice and Accountability
50,000
359
AT
294
CH
44,864
WEALTH PER CAPITA
Purchasing Power Parity (PPP) basis in International $ bn
39,448
SIZE OF ECONOMY 448
GOVERNANCE INDICATORS Percentile Rank (1-100) 2012
2012
2018f
2006
2012
CH
AT
2018f
92 CH
AT
IE
IE
LLOYD’S 2013 GROSS SIGNED PREMIUMS
Premiums in US$ m; by OECD Class
Gross Signed Premiums in US$ m; by country of origin
940
25,000
PA & Health
20,000
Property
500 4,456
15,000
3,083
Liability
Switzerland 2012 US$ 27.6bn
470
800
499
600
Motor
461
30,000
27,622
35,000
29,747
NON-LIFE DIRECT INSURANCE MARKET
28,656
TOTAL NON-LIFE DIRECT INSURANCE MARKET* Premiums in US$ m
400 300
200
10,000 100
MAT
5,000
0 2011
2012
2013
CH
AT
IE
Miscellaneous
3,479
0 2011
2012
2013
CH
AT
IE
All data, sources & data limitations are available for download at www.lloyds.com/comparecountries; * 2013 total non-life based on CAGR projection
LLOYD’S TRADING POSITION Switzerland www.lloyds.com/crystal
Insurance: Lloyd's underwriters are licensed for all classes except life, sickness and legal expenses. Reinsurance: Lloyd's underwriters may write all classes of reinsurance business originating in Switzerland Coverholders: Yes © Lloyd’s
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BUSINESS ENVIRONMENT Only gradually recovering European growth and lingering Swiss franc strength will restrain economy and inflation: Deleveraging requirements across much of Europe and a persistently strong Swiss franc will limit growth momentum in 2014. Steps taken by European policymakers since the end of 2012 have calmed Eurozone crisis concerns somewhat, but a buoyant recovery is unlikely, especially as an additional risk in the form of the Ukrainian crisis has emerged of late. Inflation has returned to roughly zero in recent months as disinflationary impulses caused by Swiss franc appreciation in 2011–12 petered out, but the Swiss franc will remain close to its cap of CHF1.20:EUR1.00 during 2014 given the fresh geopolitical risks. Swiss-EU relations are likely to suffer from the fallout of a referendum vote in favour of immigration caps: In February 2014, the right-wing Swiss People's Party (Schweizerische Volkspartei: SVP) managed to exploit popular resentment as a majority of voters opted for a restriction on immigration. This is likely to damage Swiss-EU relations as the government is now obliged to turn the referendum result into law within the next three years. The European Union has stated that a restriction on the freedom of movement invalidates Swiss-EU bilateral treaties, which also underpin free trade between Switzerland and the 28-member bloc. Switzerland will agree to weaken banking secrecy and accept automatic information exchange standards: A Foreign Account Tax Compliance Act agreement with the United States will allow Swiss banks to pass on information from July 2014, but the Swiss government is trying to solve various other disputes with the European Union and the United States regarding taxation of savings income and past tax evasion through Swiss banks. IHS assesses that the Swiss government will agree in 2014 to adopt OECD standards of transparency, including automatic information exchange. The Swiss National Bank will maintain a very loose monetary policy for an extended period: Deflation concerns that triggered drastic action from the Swiss National Bank (SNB) in August/September 2011 – the key rate was cut to zero; there was a massive expansion of banks' sight deposits at the SNB; and a maximum exchange rate of CHF1.20:EUR1.00 was established, to be defended by unlimited purchases of foreign exchange – will dissipate only gradually as a lasting resolution to the Eurozone debt crisis will require much time, causing worries to linger. A return to a monetary tightening course is unlikely before the second half of 2015.
GROSS DOMESTIC PRODUCT (GDP)
TOP-10 SECTORS (BY VALUE ADDED)
BUSINESS ENVIRONMENT INFORMATION
(nominal GDP levels in billion US$; Real GDP change)
(value added in billion US$ & 2014 Change in real %)
(provided by IHS Global Insight, April 2014)
1,200
4%
TOP SECTORS
3.0%
3%
900 1.8%
1.6% 1.0%
1.8%
1.9%
2%
1.6%
1.3%
1%
600 0%
-1%
300 -1.9%
0
-2% -3%
2010 2011 2012 2013 2014 2015 2016 2017 2018
2013 Value Added
2014 Percentage Change
1. Public Admin. & Defence 2. Wholesale trade 3. Health and social services 4. Banking & related financial 5. Business services 6. Retail trade - total 7. Construction 8. Insurance & pensions 9. Land transport 10. Pharma: drugs & medicines
64.5
0.2
60.3
2.4
42.1
0.2
40.0
2.9
37.6
3.6
36.3
1.9
34.0
1.9
28.0
2.4
17.0
4.6
15.4
4.4
Top-10 Total
375.2
For daily updates visit: > www.ihsglobalinsight.com © Lloyd’s
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INSURANCE ENVIRONMENT 2012 MAJOR DIRECT INSURERS
2012 DIRECT GROSS PREMIUMS
(Market share in % of total)
(Gross Written Premium in % of total)
Motor
476
12%
QUICK LINKS / USEFUL SOURCES Insurance Market Profiles > www.iii.org/international/profiles
1,380
2,043
Others AXA
Zurich
6,029
PA & Health
Mobiliar
10%
35%
Allianz
2012 Market Share in %
9%
Swica
Helsana
CSS
Property
Basler
Liability
4,411
Switzerland 2012 US$ 27.6bn
Visana
Generali
The Insurance Regulator > www.finma.ch Lloyd’s Agency Network > www.lloyds.com/agency Lloyd’s Claims Team > www.lloyds.com/claims
MAT 7%
The Swiss Insurance Association > www.svv.ch
Other
3% 4%
6% 4%
5%
Miscellaneous
13,282
5%
BUSINESS CULTURE GUIDE > http://www.kwintessential.co.uk
Source: Association: > www.svv.ch
Source: Regulator: > www.finma.ch
(View Resources > Culture Guide)
The Swiss non-life insurance market is estimated to be around US$ 27.6bn for 2012: Switzerland has a long-established and well-developed insurance industry. Over the years, Zurich has developed into one of the leading insurance and reinsurance centres in the world. Industry sources have pointed towards good profitability for Swiss insurers despite record flood losses in 2005. However, more recently, competition has become more intense, particularly in the commercial and corporate property and liability classes as well as the social security worker's compensation class. As in many other developed insurance markets, Swiss insurers were badly hit by the downturn in financial markets. Yet, the absence of major storm losses and a slight rise in non-life insurance premiums has helped insurers to weather the broader fallout of the global financial crisis. Switzerland is open to foreign insurers and they make up just under half of the market. Distribution: Tied agents dominate personal lines and small commercial business with representatives in every village.The use of brokers in the Swiss market has increased drastically in the last few years; so much so that they control almost the entire international market and an estimated 70% of industrial business regardless of origin. Local reinsurers: Swiss Re is the dominant reinsurance player. SCOR took over the Swiss reinsurer Converium. With major decisions taken in Paris, retrenchment of its Swiss position has taken place. However, the Zurich / Zug area has benefited from a steady influx of European and Bermudan reinsurers locating their European operations in the area. © Lloyd’s
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LLOYD’S BUSINESS 2009-2013 LLOYD’S TOTAL PREMIUMS
2013 LLOYD’S HIGH LEVEL CLASSES
Gross Signed Premiums; Direct versus Reinsurance; in million US$
Gross Signed Premiums; high level classes; in million US$
2013 GROSS SIGNED PREMIUMS*
600 500
Total
US$ 499m
400
Reinsurance Direct
US$ 301m US$ 198m
0.0 2.3
Property Treaty 258
300
256
301
195
*COUNTRY OF ORIGIN PREMIUMS
200
163
198
203
214
2010 Direct
2011
2012 Reinsurance
Policyholders are based or headquartered in this territory;
Premiums may be written outside this territory;
198
0 2009
91.9
Property (D&F)
57.8
Marine
192
100
UK Motor Overseas Motor
2013 X X
Not necessarily where risks are located May differ to what is reported to local regulator (dependent on local requirements).
133.6
Energy
97.8
Casualty
46.0
Casualty Treaty
4.1
Aviation
25.9
Accident & Health
40.0
0
20
40
60
80
100
120
140
SOURCE: Market Intelligence based on *Gross Signed premiums; Xchanging (2014); unaudited figures based on country of origin and processing by calendar year; see Appendix for details
Mr Graham West Type 3 Office
A Type 3 office is defined as a Lloyd's office headed by a Country Manager who in addition to meeting regulatory requirements in that territory also proactively supports the business development objectives of the managing agents in that territory.
Lloyd’s Country Manager
Lloyd's Versicherer Zweigniederlassung Zurich Seefeldstrasse 7 8008 Zurich Switzerland
TELEPHONE: EMAIL:
+ 41 44 266 6070 graham.west@lloyds.com © Lloyd’s
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160
LLOYD’S OBJECTIVES
To be the market of choice for the specialist insurance requirements of Swiss insureds and intermediaries.
LLOYD’S KEY INITIATIVES 2014
To engage with and provide services to individual managing agents: To be achieved through adapting IM services menu to Switzerland and providing local and tailored support to Managing Agents in both Switzerland and London.
To strengthen relationships with key personnel at managing agents: A market intelligence-led engagement which captures the responsibilities, priorities and risk appetite of Managing Agents. Also, bring first timers to Switzerland and introduce to potential partners.
To widen the pool of Lloyd’s Swiss intermediaries: Engage with potential new Swiss intermediaries including in-house brokers, widen geographical scope of Swiss network and examine scope for Lloyd’s accreditation for in-house brokers.
EVENTS & MARKET INTELLIGENCE 2014 LLOYD’S EVENTS
2014 INDUSTRY EVENTS
MARKET INTELLIGENCE Available Market Intelligence products for this territory include:
SIRM Forum, November
Networking event, Geneva, September
SIBA AGM and Conference, March
Class of Business Event, Zurich, June
ACA Forum, May
Country Profile Market Presentation Country Roundup Class Review – Lite (work in progress) www.lloyds.com/SwitzeralndMI © Lloyd’s
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APPENDIX MACRO-ECONOMIC & BUSINESS ENVIRONMENT DATA Source: IMF (www.imf.org/external/data.htm), World Bank (http://data.worldbank.org/), IHS Global Insight. Notes: GDP data on size and wealth of the economy is reported in Purchasing Power Parity (PPP) terms; this is the most accurate indicator of the true standard of living in each country and therefore potential demand. To calculate this, GDP is converted from local currency to an international $ currency using PPP exchange rates rather than the market exchange rate. The PPP local currency-to-international $ exchange rates are determined such that a standard basket of goods has the same price in international $ terms in each country. This adjusts for the differing costs of goods across countries, when converted at market exchange rates. INSURANCE MARKET DATA Source: Reported data derived by Lloyd’s Market Intelligence team; original source is regulatory bodies, associations, third party information providers. Notes: Data is reported in US$. For more information, see www.lloyds.com/comparecountries. Exchange Rates Note: Where required, data has been converted to US$ using annual average exchange rates as per www.oanda.com. LLOYD’S PREMIUM DATA Source: Reported data derived by Lloyd’s; original source is Xchanging (data therefore contains only premiums processed by Xchanging). Notes: Data is reported is US$, on a calendar year basis and is signed gross premiums. This differs from the data published in the Lloyd’s Annual Report, which is also on a calendar year basis, but is written gross premiums and sourced directly from Syndicates. Differences are therefore (1) timing inconsistencies between signed and written gross premiums; (2) inconsistent use of exchange rates by Syndicates and Xchanging; & (3) incompleteness of Xchanging data set for certain classes of business (a substantial amount of premium is not processed by Xchanging and missing from the REG 258 data set; this comprises, for example, UK Motor). Exchange Rates Note: Data has been converted to US$ using monthly exchange rates provided by Xchanging. Definitions: Gross Signed Premiums: Original and additional inward premiums, plus any amount in respect of administration fees or policy expenses remitted with a premium but before the deduction of outward reinsurance premiums. Calendar Year: Relates to the calendar year in which the premium, additional or return, is processed by Xchanging. This is irrespective of the actual underwriting year of account, which is determined by the inception date of each risk. Country of Origin: Denotes the domicile of the insured party (i.e. the coverholder or policyholder). This is the country from which demand for the insurance / reinsurance emanates, & is irrespective of the country to which the risk is classified for regulatory reporting purposes. Example: A policy holder in the UK insuring a holiday home in France would be classified as a UK risk by “Country Of Origin”, but “French” for regulatory reporting purposes. Similarly a risk incepting on 1st December 2007 would be classified at 2007 “Underwriting Year of Account” but may not be processed by Xchanging until 2008 and so be allocated to the 2008 “processing year”. ACCESSING THE DATA: to access the raw data in this document, and equivalent data for other countries, see www.lloyds.com/comparecountries.
DISCLAIMER: This document is intended for general information purposes only. Whilst all care has been taken to ensure the accuracy of the information, Lloyd's does not accept any responsibility for any errors or omissions. Lloyd's does not accept any responsibility or liability for any loss to any person acting or refraining from action as a result of, but not limited to, any statement, fact, figure, expression of opinion or belief contained in this document. © Lloyd’s
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