A large number of small and medium-sized enterprises (SMEs), but also larger enterprises, opt to seek affiliation to a collective foundation of an insurance company for their Pillar 2, occupational pension provision, allowing them to fulfil their obligation as employers. Our Pillar 2 offering covers the entire range of customer needs. We provide products ranging from comprehensive insurance to the semi-autonomous Perspectiva pension solution and reinsurance solutions for pension funds.
These solutions allow us to generate value for our customers in various ways – value that they can reap the benefits from in old age. This applies both in “normal” times and in times of crisis. Long-term and responsible action is a Baloise principle and is reflected in our activities for sustainable development.
Our private and business customers alike have always been able to rely on us (Article in German and French only) and can continue do to so during the coronavirus crisis. We are able to offer all of our services continuously and subject to no restrictions. We have also launched a range of special initiatives and financial support programmes to support our customers and the general public during the pandemic, such as by extending payment terms for rent and insurance premiums, but also with regard to occupational pensions:
«In order to make a contribution to our customers’ liquidity in the current situation, we are temporarily reducing the debit interest rate for occupational pensions to 1 per cent. This will apply until the end of September 2020 for all policies in the compulsory and non-compulsory collective foundation.»
This means that our customers who are currently unable to pay an outstanding premium will not have to pay interest on arrears of 3.75 per cent on the outstanding amount, but rather only a reduced rate of 1 per cent. This will help to increase the financial resources currently available to our customers and means that they will not have to pay any substantial additional amounts in the form of interest on their outstanding premiums later on down the line.
The comprehensive insurance solution (in German and French only) is a safe haven for our customers, particularly in times of crisis. This is not only because the funds are invested based on a defensive strategy, i.e. without investing too much in volatile equities, but also because Baloise absorbs any losses incurred. This means that companies never need to worry about a shortfall in their pension fund.
This capital guarantee for retirement provision is hugely important, especially in times of crisis when the stock markets are crashing and the entire economy is losing momentum. Our customers benefit, both now and also when the economy is not faced with a crisis, from protection for their invested capital, including the interest generated, which comes to 1 per cent for the compulsory component and 0.25 per cent for the non-compulsory component. Given that retirement provision tends to be invested over a long period, usually spanning 40 years, this makes quite a difference.
Semi-autonomous pension solutions (in German and French only) do not offer any guarantee on the invested capital. This means that our customers bear the investment risk themselves, but benefit from much higher return opportunities. The risk is particularly high when unforeseen events – like the coronavirus crisis – materialise, sending shock waves through the global economy.
Our Perspectiva solution, however, also provides support in situations like these so as to safeguard our customers’ financial futures. First of all, the funds are invested dynamically, with the weighting attached to opportunistic investments increasing when the financial markets are doing well and falling when they are performing poorly. This helps to significantly reduce the investment risk involved. Second, we can use our asset management expertise to predict certain developments, allowing us to react quickly and further minimise any risk for our customers. Even without a capital guarantee, one of the clear advantages of semi-autonomous pension solutions comes to light in times of economic growth: the economic expansion is reflected strongly in the return on investment.