The Baloise Group is more than just a traditional insurance company. The changing security, safety and service needs of society in the digital age lie at the heart of its business activities. The 7,900 or so employees of Baloise therefore focus on the wishes of their customers. The best possible customer service, combined with innovative products and services, makes Baloise the first choice for people who want to feel ‘simply safe’. Located at the heart of Europe, with its head office in Basel, the Baloise Group is a provider of prevention, pension, assistance and insurance solutions. Its core markets are Switzerland, Germany, Belgium and Luxembourg. In Switzerland, the Group also operates as a specialised financial services provider, offering a combination of insurance and banking services. The Group offers innovative pension products to retail customers throughout Europe from its competence centre in Luxembourg. Bâloise Holding Ltd shares are listed in the main segment of the SIX Swiss Exchange.
In an eventful 2020, Basler was able to maintain stability in its occupational pension business. The net investment yield went up by 0.21 percentage points year on year to 1.76 per cent, demonstrating once again that Basler is a reliable partner for all stakeholders. Despite the challenging conditions caused by the pandemic, Basler fulfilled all of its obligations.
A successful year overall for occupational pensions at Basler despite some turbulence
The broader macroeconomic picture deteriorated in 2020 – at times sharply – due to the COVID-19 pandemic. Although the environment remained challenging, Basler’s occupational pension business generated premium income of CHF 2.2 billion and earnings of CHF 40.1 million in connection with more than 18,000 contracts. The payout rate, which comprises claims, reserves and surpluses, was slightly higher than in 2019 at 93.4 per cent. Once again, a significant proportion of the payout rate was attributable to the recognition of reserves in light of rising life expectancy, low interest rates and, consequently, excessively high conversion rates. Basler set aside more than CHF 120 million for this purpose. Nonetheless, the company was able to allocate CHF 15 million to the surplus fund. Interest on retirement assets was paid at a rate of 1.00 per cent for the mandatory part and 0.75 per cent for the non-mandatory part, whereby 0.50 per cent was credited in the form of surpluses.
Partially autonomous collective foundation Perspectiva is an attractive alternative to comprehensive BVG insurance
The partially autonomous collective foundation Perspectiva is becoming increasingly established and recorded further growth in 2020. The fact that more than 3,000 companies have now signed up to Perspectiva shows that Basler’s partially autonomous solution is an ideal model for many customers. The combination of significantly higher potential for returns and lower costs is attracting many companies to partially autonomous solutions. The collective foundation has a very good age structure. This pension solution from Basler manages the risk of partial autonomy responsibly and is thus well-prepared for the future.
Retirement savings shortfalls and low interest rates require political action
“The challenges in the occupational pension sector remain pressing. Alongside persistently low interest rates, there is also the issue of retirement savings shortfalls resulting from excessively high compulsory conversion rates. We have therefore decided to gradually lower the conversion rates for comprehensive BVG insurance from 2022, both for retirement savings above the income threshold and for mandatory retirement assets,”* says Dominik Glaser, Head of Group Life at Basler Switzerland. “Basler remains committed to the comprehensive BVG insurance model. But the external parameters set by legislators and the regulator are very restrictive and it is becoming increasingly difficult to operate successfully in this market. The reform proposals that were put forward by the Swiss Federal Council at the beginning of the year are a good start. They also include improvements for part-time workers and those working in the low-wage sector. A particularly pressing challenge now is to quickly reach viable compromises on unresolved issues regarding compensation for the ‘transitional’ generations to ensure that the much-needed overhaul of the system can be carried out successfully,” Glaser concludes.