What are the main features of individual life insurance in Switzerland?
The Swiss pension system is based on three pillars. The mandatory social security system (Pillar 1) and occupational pensions (Pillar 2) are supplemented by voluntary private pension schemes (Pillar 3).
Private pensions and individual life insurance encompass cover for financial risks in the event of disability or death, saving to maintain an accustomed standard of living in old age, and business in payment plans and life annuities.
Baloise Life Ltd is one of the four largest life insurers in Switzerland. The key driver of our premium income is endowment insurance, which centres on the objective of saving and investing. Payment for these policies can be made in the form of either a single premium or regular premiums. This is where we face the greatest challenges at present.
Yes, precisely; market interest rates have remained at historically low levels for years now. As far as our customers are concerned, these low rates tarnish the appeal of our Pillar 3 insurance solutions. From the insurer’s perspective, low rates of course also dent the profitability of its guarantee-related products. Because we do not expect the interest-rate environment to improve in the next few years, we are now facing a real dilemma. In future we will have to alter our sales strategy, which relies heavily on our offering the highest possible guaranteed returns. Our product focus will therefore shift towards much lower guaranteed returns as well as bank-related products that do not provide any guarantees but instead offer very interesting risk / reward profiles. We are well placed to take this decisive step forwards. Working in tandem with Baloise Bank SoBa in Switzerland, for example, we offer an extensive range of modern insurance and banking solutions.
We believe that we add value by offering personalised pension advice and attractive pension solutions. Insuring against pension-related risks is a fundamental need for many customers.
The 360-degree advisory approach used by Baloise in Switzerland therefore attaches great importance to the subject of pensions. As far as saving is concerned, insurance solutions have an advantage over banking solutions because they offer guaranteed endowment benefits. Banking products, on the other hand, score highly on flexibility and their wider range of investment options. A key aspect of our customised product solutions is how we identify our clients’ individual needs. This forms part of our strategy of focusing relentlessly on our customers.
Even in challenging economic conditions, our 2016 product portfolio with the slogan ‘A product for every customer’ means we are optimally placed to provide our customer advisors with an innovative and extensive range of solutions. The focus remains on customers and we can meet their needs precisely with a solution from the broad selection of guarantees / services offered by banking and insurance solutions. In addition to financial security, our core competency, we now offer the ‘Life Coach’ insurance add-on – a unique package of customised services for surviving dependants in the event of a death.