Investment strategy

In the 2018 financial year, an overall performance of -2.7 percent was posted on fixed assets of around CHF 50 billion. While some of the listed shares finished the year with considerable losses and the bond investments also made a small loss, investments in private equity, direct real estate, loans and almost all hedge fund strategies achieved positive results. The investment situation in money market investments continued to prove difficult due to the negative interest rates in Switzerland. Because of the high interest rate gap versus foreign currencies, significant costs were incurred on currency hedging.

The financial coverage ratio decreased from 143 percent in the previous year to around 123 percent. This drop is primarily due to the reduction in the technical interest rate for long-term benefits. In addition, the coverage ratio also takes into account the exceptional premium reduction that could be granted as a result of the pleasing trend in investment income over the past few years.

Each year, despite major prevention efforts, a large number of occupational and leisure-time accidents occur which lead to disability or even death. In some 1,900 cases, accident victims receive a disability pension or widows/widowers or orphans receive a survivor’s pension. In the year a pension is awarded, Suva defers funds for future pension payments as pension actuarial reserves. This capital constitutes the largest share of fixed assets.
Provisions for short-term insurance benefits, such as treatment costs and daily allowances, as well as reserves make up the remaining assets.

The investment strategy is based on longevity and broad diversification. It has a balanced investment portfolio. Around half of the assets are invested in interest rate and credit investments, 32 percent are invested in shares and private equity, around 13 percent are invested in real estate and real estate funds, and the remainder is invested in other alternative investments. With this strategy, Suva achieves adequate return on the long-term average. Low-risk, fixed-interest capital investments alone would not meet the return requirements.

To compensate for significant fluctuations in value on capital investments, in good years Suva increases fluctuation reserves. In bad years it releases them again.

Suva’s investment strategy can best be compared to that of a pension fund. Thanks to its balanced investment portfolio, Suva is able to survive even the most difficult times. A comparable investment strategy would have achieved an average annual yield of 5.6 percent since 1918. The realised performance since 2000 exceeds similar pension fund indices, e.g. the BVG-25-Index and the CS Pension Fund Index.

In addition to the financial aspects, Suva also takes into account ecological, ethical and social issues. The normative basis for this is Swiss legislation as well as the ten basic principles of the UN Global Compact . These follow the Universal Declaration of Human Rights and the Declaration on Fundamental Principles and Rights at Work of the International Labour Organization. They also take into account the principles of the Rio Declaration on Environment and Development as well as the UN Convention against Corruption .

Suva strongly believes that the effects of a responsible investment strategy can be enhanced when different market actors pursue the same goals together.

Further information of the respective general meeting is available here: 

• General meetings 2015 (german) 
• General meetings 2016 (german)
• General meetings 2017 (german)