Non-health insurers are also grappling with trust issues related to large-scale claims after natural disasters or significant events, facing public scrutiny that can damage their reputation. They must effectively communicate their claims processes and demonstrate a commitment to fair handling to maintain customer confidence.
“At the heart of Swiss success lies a commitment to quality, trust and resilience—values that are paramount as we navigate the insurance landscape of tomorrow.
The change to a customer-centered experience model will require insurers to collect and analyze much more data to understand customer behaviors and preferences. And above all, offer real-time information to maintain customer trust.
As technology reshapes our world, Swiss insurers face an extraordinary opportunity to lead in trust, innovation and customer-centered solutions. Insurers will continue modernizing the core areas of property and casualty insurance, health insurance and especially life insurance, which in many cases are based on old technologies and need to be migrated and modernized. The insurers need to build an ecosystem of cross-industry partners and technology partners to reach more customers and offer them new value-added services.”
Liliana Scheck, Country Managing Director, GFT Schweiz AG
Rapidly Evolving Customer Needs and Preferences
What are the most innovative, personalized insurance products that Swiss insurers are launching to meet shifting customer needs?
Customers increasingly seek personalized and flexible insurance products that align with their evolving lifestyles, such as on-demand insurance for gig workers or temporary travel coverage.
As healthcare costs rise, will Swiss health insurers be able to sustain profitability while delivering flexible, customer-centric products?
Health insurers must innovate by offering customizable products that cater to individual health needs, emphasizing wellness and preventive care. However, this push for flexibility coincides with financial pressures on supplementary health insurance due to rising healthcare costs and capped premiums, which are squeezing profit margins—especially in hospital supplementary insurance. Without additional measures, margins for ambulatory products may continue to decline, limiting insurers' ability to invest in innovative solutions.
Flexible Insurance for Evolving Lifestyles:
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“Swiss insurers can cater to modern lifestyles by offering on-demand insurance options, such as pay-per-use coverage for gig economy workers and customizable travel insurance that activates only during trips. These flexible products align with customers’ needs for transparency, immediate access and control over coverage, fostering stronger customer loyalty and engagement.
Flexible insurance products aligned with today’s dynamic lifestyles are essential to winning and retaining customer loyalty."
Markus Reding, Managing Director Insurance, Switzerland, Zühlke Group
How will health insurers strategically reposition themselves in the coming years? And what will be the impact of the revival of the single health insurer debate as premiums rise?
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“In its day-to-day consulting work with health insurance top-level executives, Eraneos has once again identified a growing need for strategic clarification of the business purpose or value and the possibility of clear strategic positioning, as well as the possibility of better managing the top and bottom line in a highly regulated market.
This is in light of the renewed discussion and growing public support for a single health insurance, as we are currently experiencing in Geneva and French-speaking Switzerland, because firstly, the fully government-regulated basic insurance and risk compensation make it impossible for insurers to provide here a unique selling proposition, secondly, the basic insurance business is again loss-making for almost all insurers and the losses can only be offset by a broader range of supplementary insurances or asset management, and thirdly, the cost of acquiring new customers is disproportionately high in the context to the two aspects mentioned above.”
Dr. Henrik Czurda, Head of Business Transformation at Eraneos, expert on the Swiss health insurance landscape
Are Swiss non-health insurers prepared to compete in new ecosystems, or will non-insurance brands steal the show?
Non-health insurers are challenged to develop real-time, usage-based products for services like car sharing or temporary home rentals. Swiss insurers are trying to integrate these innovations into broader business ecosystems centered around mobility, home, living and SMEs. Despite progress, the economic viability and profitability of these ecosystems remain uncertain, particularly regarding customer willingness to pay for new services. There's also a risk of insurance brands becoming marginalized if non-insurance brands dominate these ecosystems, potentially eroding insurers' direct relationships with their customers.
“Our recent Kyndryl readiness report reveals that 68% of insurance executives struggle to keep up with the pace of technological advancements, highlighting the need to leverage technology for business growth.”
Werner Rapberger, Consult Partner, Kyndryl
An Increasingly Digital and AI-driven World
Is Swiss insurance lagging behind in digital innovation, and if so, what are the most urgent areas for improvement?
Digital transformation and AI are revolutionizing the insurance industry by enhancing processing efficiency, customer engagement and enabling new products like telematics-based insurance.
However, Swiss insurance companies generally lag behind their Central European counterparts in digital advancement, although they are actively upgrading core technologies. A FINMA survey indicates the widespread use of AI in customer interactions, claims processing, sales, and pricing. To enhance governance, Swiss insurers are forming committees to refine their AI processes.
For health insurers, the challenge lies in implementing AI for claims processing and personalizing health plans while ensuring data security and privacy, which are paramount to consumers. Meanwhile, non-health insurers face obstacles in integrating IoT and AI for risk management in real estate and automotive insurance, requiring significant technology investments.
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"Reducing costs while increasing healthcare quality and professionalism is a goal we all support. Research shows digitalization is key to achieving this, yet our fragmented system creates substantial barriers. If providers, insurers, and regulators work together on integrated digital solutions, we can make significant progress in transforming healthcare in Switzerland."
Thomas Reitze, Managing Director T-Systems Schweiz AG
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“The tension between technological progress and human interaction, described by John Naisbitt in his book High Tech / High Touch as early as the 1980s, can now be redefined in customer dialogue. With the use of generative AI, it is possible to create advisory experiences that not only stand out on paper but also generate tangible customer success.”
Kaspar Trachsel, Head of Marketing and Sales, Member of the Executive Board, Sanitas Management AG, Verwaltungsrat Sanacare Gruppenpraxen AG
Meanwhile, non-health insurers face obstacles in integrating IoT and AI for risk management in real estate and automotive insurance, requiring significant technology investments.
Modernizing IT Infrastructure:
“To stay competitive, Swiss insurers should transition from outdated legacy IT systems to cloud-native, modular architectures. This upgrade enables seamless integration of digital tools, supports faster product deployment, and allows for agile responses to market changes. Additionally, a modern IT foundation enhances data accessibility, allowing insurers to harness real-time analytics for improved decision-making and more responsive customer service.
Modern IT infrastructure is a strategic investment that boosts agility, integrates innovation, and supports long-term competitiveness."
Automation for Efficiency and Competitiveness:
“Swiss insurers can streamline operations by implementing automated claims processing systems, which accelerate claim handling, allow faster payouts and reduce administrative costs. Self-service portals provide customers with 24/7 access to policy information and claim status updates, boosting satisfaction and reinforcing a responsive, digital-first reputation.
Automation elevates efficiency and customer satisfaction by simplifying processes and delivering 24/7 access to essential services."
Markus Reding, Managing Director Insurance, Switzerland, Zühlke Group
Climate Risk and a Focus on Sustainability
As climate risks become unavoidable, how are Swiss insurers adapting their underwriting and pricing models to stay ahead of the curve?
The growing impact of climate change is pushing insurers to reassess how they manage environmental risks, with an increased focus on sustainability.
However, findings from a recent EY study indicate that sustainability is important for around 66% of respondents, but for the majority only when combined with price considerations.
At the same time, 40% of respondents are unsure whether their insurance provider is committed to sustainability. This uncertainty weakens its influence on purchasing decisions.
Health insurers face challenges in developing products that consider climate change's effects on public health, such as the rise in climate-related diseases.
Non-health insurers must innovate their underwriting and pricing models to address increased risks from natural disasters and transition to greener practices.
A significant obstacle for Swiss insurers is implementing effective ESG reporting, a challenge highlighted by the EY study. The complexity of compliance is evident in the approximately 1,400 data points required for ISSB and over 2,600 proposed ESG-related guidelines and standards. These regulatory challenges make it difficult for insurers to develop consistent and comprehensive reporting strategies.
Convergence, Collaboration, and Competition
Could convergence with financial institutions and tech companies be the key to unlocking new growth, or a path to losing control over the customer relationship?
The lines between different financial services are becoming increasingly blurred, as insurers are now forming partnerships with tech firms and other financial institutions to offer integrated services.
Health insurers are increasingly collaborating with health tech companies to integrate wearable technologies and health apps into insurance products, ensuring the secure integration of data across platforms. Non-health insurers are facing challenges in managing partnerships with car manufacturers and smart home technology providers to offer integrated insurance solutions.
The insurance industry in Switzerland, both health and non-health sectors, is at a critical juncture where adapting to these trends is not just beneficial but necessary for survival. The challenges posed by these trends offer an opportunity for innovation and differentiation in a competitive market.
Governmental Regulations in the Swiss Insurance Sector
Will government pressure on affordability force Swiss health insurers to rethink their pricing strategies?
Government regulations significantly shape the Swiss insurance landscape for both health and non-health sectors.
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Health Insurance Regulation Updates
In 2024, the Swiss government emphasizes premium affordability and transparency. The Premium Relief Initiative aims to support low-income families, influencing insurers' pricing strategies. Increased transparency in pricing and services will drive insurers to enhance communication and innovate products, fostering competition as consumers become more informed.
What new AI regulations are set to disrupt the insurance industry, and how can Swiss insurers prepare for these changes now?
Switzerland's current legal framework for AI is principle-based and technology-neutral, but new regulations are anticipated in 2025. Insurers should stay informed about potential sector-specific regulations aligned with EU standards as AI becomes more prevalent.
Top Players in the Swiss Insurance Sector 2024
With the formation of a new industry association in 2025, how will the competitive dynamics in the Swiss health insurance market change?
The Swiss insurance sector is characterized by a competitive landscape with both health and non-health insurance companies striving for market leadership.
In 2024, Switzerland's largest health insurers, including Assura, Atupri, Concordia, CSS, EGK, Groupe Mutuel, Helsana, KPT, ÖKK, Sanitas, SWICA, Sympany, and Visana, have formed a new industry association. This association, set to begin operations in 2025, aims to strengthen the representation of interests in the health insurance industry and unite the sector, representing over 90% of basic health insurance policyholders in Switzerland.
Zurich Insurance Group stands out as a major player in the non-health insurance sector, ranking among the world's largest insurance companies by net premiums written and net non-banking assets. Its global presence and financial strength position it as a leader in the Swiss market. The company's focus on risk management, innovation, and customer-centric solutions has been pivotal in maintaining its competitive edge.
Non-Health Insurance Regulations
For non-health insurers, the Federal Financial Market Supervisory Authority (FINMA) mandates robust risk management frameworks. Insurers must adopt comprehensive risk assessments, particularly regarding climate change and cyber threats, while discussions on solvency requirements may compel higher capital reserves, affecting innovation and growth potential.
With strict data protection regulations in place, are insurers doing enough to protect customer data while still leveraging it for innovation?
Both sectors face stringent data protection regulations under the Federal Act on Data Protection (FADP) and the General Data Protection Regulation (GDPR). Insurers must ensure compliance while leveraging data analytics, necessitating enhanced cybersecurity measures to protect consumer information.
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Essential Leadership Skills for Navigating Challenges in the Swiss Insurance Sector
How can insurance executives ensure they are leading successful digital transformations, and which leaders are already excelling?
As the insurance industry faces unprecedented challenges, from evolving customer needs to heightened regulatory demands, the leadership of both health and non-health insurance companies must demonstrate the right blend of skills to drive transformation.
Key Leadership Skills
- Digital Transformation Leadership: Executives, including CEOs, CIOs, and CDOs, must champion digital initiatives, leveraging AI, data analytics, and emerging technologies to enhance efficiency and customer experiences. Health insurers require additional expertise in integrating digital health solutions like telemedicine and AI diagnostics.
- Customer-Centric Innovation: CDOs and product teams should focus on developing flexible, usage-based insurance solutions that cater to shifting consumer preferences. In health insurance, this means creating personalized offerings tailored to individual health needs and preventive care.
- Cybersecurity and Data Governance: CIOs and CROs must secure sensitive data while ensuring compliance with regulations like GDPR and FADP. This balance between advanced analytics and data privacy is crucial, especially for health insurers safeguarding sensitive medical information.
- Sustainability and Climate Risk Management: CSOs and CROs should integrate ESG principles into risk assessments and develop innovative insurance products addressing climate risks. Non-health insurers, in particular, need sophisticated risk modeling for large-scale events, utilizing technologies such as IoT and AI for real-time monitoring.
- Agility in Change Management: Leaders must foster agility and cultural change to embrace new technologies and innovative practices. CEOs and COOs should lead initiatives that empower teams to adapt swiftly to market disruptions.
- Financial Acumen for Strategic Investment: CFOs play a crucial role in aligning financial resources with transformation goals and overseeing investments in digital infrastructure and sustainability initiatives. Non-health insurers should prioritize capital allocation toward green bonds and sustainability-focused products.
- Collaboration and Partnerships: CEOs and CIOs should guide companies in forming strategic collaborations with technology firms and InsurTech startups to integrate new technologies and enhance insurance offerings. For health insurers, partnerships with health tech companies to incorporate wearable devices and telemedicine into products are increasingly vital.
Are your leadership teams equipped to handle the digital transformation and sustainability challenges ahead, or do you need to rethink your executive lineup?
Evaluating the readiness of the leadership team is essential for ensuring that the company is well-equipped to face current and future challenges. Below are key assessment areas that can help identify strengths and potential gaps:
- Digital Literacy and Technological Savvy: The board should assess whether the leadership team has a deep understanding of how technology drives transformation. This includes evaluating past successes in digital adoption and partnerships with InsurTech firms.
- Sustainability and ESG Alignment: Leadership should be evaluated on their ability to align company operations with ESG goals, particularly in how they manage climate-related risks and integrate sustainability into products and services.
- Risk Management and Compliance Track Record: An effective leadership team will have a proven record of proactively managing risk, especially in relation to new regulations and emerging threats such as cybersecurity and climate change.
- Cultural and Talent Development: Leaders should foster an innovative, forward-thinking culture and be committed to talent development, particularly in digital skills. Indicators of success include low employee turnover in key roles and active upskilling initiatives.
- Board Engagement and Transparency: A leadership team that engages proactively with the board, seeking input and providing transparent updates on strategic initiatives, is a strong indicator of readiness. Regular reporting on key transformation projects—such as digital adoption or sustainability efforts—is essential for building board confidence in the leadership team’s capabilities.
Conclusion
Are Swiss insurers ready to adapt to the biggest industry changes on the horizon, or will outdated models put them at risk of falling behind?
The Swiss insurance sector is at a pivotal moment, facing challenges and opportunities influenced by global trends. Key issues such as the widening trust gap, evolving customer needs, digital transformation, and sustainability are reshaping the industry. To effectively navigate these changes, Swiss insurers must focus on innovation, collaboration and customer-centric solutions.
Leaders should cultivate essential skills in digital transformation and risk management, fostering a culture of agility to adapt to the dynamic environment. By embracing these trends, insurers can mitigate risks and position themselves for sustained growth.
For organizations seeking top candidates for executive positions in this evolving landscape, Wirz & Partners, a leading Swiss executive search company, is ready to assist. Contact us to discover how we can support your search for exceptional leadership talent tailored to your needs.
"A true digital transformation turns a caterpillar into a butterfly. With a poorly executed one, you only get a really fast caterpillar." (Georg Westermann) And with a failed one, the caterpillar merely changes its color. Organizations in the insurance sector are caught in the dynamic between digital transformation, innovation, and the norms of a heavily regulated industry. Processes and systems need modernization to remain competitive and keep pace with technological advancements. At the same time, demand for personalized insurance products is growing, requiring a flexible and data-driven infrastructure. However, requirements such as data protection set clear boundaries. Finding the optimal path within this tension will remain one of the major challenges in 2025."