The Federal Office of Public Health (FOPH) watches over health insurance companies in the basic insurance. To muula.ch, the authority now makes statements about their solvency.
Swiss health insurers have just completed their premium round for the coming year.
While on the one hand there are long faces over the departures of customers, but on the other hand eyes are shining because new business with those wishing to switch to basic insurance has gone well.
Premium boost has an effect
When there is a lot of new business, there are major shifts in the portfolio, mainly at small insurers, which can also upset the calculation. Solvency must also be taken into account, as it is likely to be affected by a large surge in new business.
Are there currently worry lines over the solvency of Swiss health insurance companies? No, explained the responsible spokesperson from the FOPH in response to an inquiry from muula.ch.
The FOPH is currently only slightly concerned about the financial situation of Swiss health insurers in basic insurance, the authority said. An important factor influencing solvency for 2023 is new business from the current round of premiums.
However, it was not yet possible to make any concrete statements regarding the effects from Jan. 1, 2023, it added.
However, the approved premiums for the following year includes insurers’ estimates of solvency for the following year, which are checked for plausibility and taken into account by the FOPH when approving premiums.
Crazy stock markets
But what does the financial situation among health insurers look like in view of the upheavals on the capital markets – the sharp rise in interest rates alone is causing assets to collapse, as bonds with lower coupons are worth much less?
At the end of September the FOPH published the insurers’ solvency calculations, which refer to the state of knowledge on January 1, 2022, and then placed them into the current situation.
At that time, the supervisory authority had announced that since the beginning of 2022, the starting position had changed significantly with the war in Ukraine, because of interest rate increases and due to high inflation.
Lower cost increase
“These events had a significant negative impact on the capital markets. Because of the resulting capital losses and additional actuarial losses, existing reserves declined significantly during 2022.”
As a result, the existing reserves at the beginning of 2023 are likely to have melted from 12 billion to well below 10 billion Swiss francs, or by almost 20 percent, the FOPH had therefore stated at the end of September.
The situation has not changed significantly since then, the authority now informed muula.ch in this regard, giving a quasi ‘all-clear.’
In addition, a slight easing could be recorded actuarially with regard to the cost increase in the health care system between the second and the third quarter of 2022, the Bern authority additionally put the financial situation into perspective.
Industry must lead the way
However, the FOPH sees first the obligation of a health insurance company, if it would come to a deterioration of solvency at that company. The basic insurers around Helsana, CSS, Swica, Concordia, Groupe Mutuel, Visana, Sanitas & Co. would first have to take measures themselves before the authorities would take action, the FOPH explained.
However, the supervisory authority did not want to reveal whether there are currently talks with individual health insurers regarding any possible tense solvency situations.