Digitalisation is making radical changes to the way we live and work. More and more people are working in the services sector. Occupational accidents are on the decline, while leisure-time accidents are increasing in number. How is Suva reacting to these megatrends? After 100 years, is it really still needed? Looking to the past and the future with Markus Dürr, Chairman of the Board of Directors, and Felix Weber, Chairman of the Board of Management.
Felix Weber, Vorsitzender der Geschäftsleitung und Markus Dürr, Suva-Ratspräsident im Gespräch.
Mr Dürr, Mr Weber – what went especially well for Suva in 2016?
Markus Dürr: I was particularly pleased with the good results that Suva achieved, in spite of its difficult position in the capital market and the negative interest rates that also proved an obstacle. We have sufficient reserves and in the coming years we will also be able to weather even bigger upheavals, should they come to pass. Suva is able to deal with risks in every respect. And as the Chairman of the Board of Directors, I am especially interested in the new Board of Management, which was established a year and a half ago and has now really hit its stride and performs excellent work.
Felix Weber: I am of course very pleased with the performance of 4.1 per cent on our non-current assets. We also fulfilled our expectations in terms of claims as well, once again registering fewer occupational accidents and lower treatment costs per case. And, as a recent survey showed, our customers are very satisfied with our work. There has been good news on the operational front too: the Board of Directors has signed off on our new strategy.
In comparison with the pension fund index, for example, Suva’s investment performance is regularly at a very high level. How do you achieve this?
Weber: We are broadly diversified and we have a long-term investment strategy. We manage our non-current assets – worth 48 billion Swiss francs – with specific purposes in mind, primarily safeguarding the pensions of our insurees over the long term. For instance, we ensure that we can meet our ongoing payments with our current premium income. This means that there is very little risk of having to sell assets at an inopportune moment, while also giving us room to act in a counter-cyclical manner and buy at low prices. This allows us to take more risks than other insurance companies are able to.
Dürr: We have an excellent team that manages our assets and can implement its ideas rapidly. This enables a positive atmosphere to prevail.
Weber: However, one of the pricier aspects of our work is hedging, in other words safeguarding our assets in foreign currencies. With the introduction of negative interest rates, the associated costs have increased considerably. With profit expectations remaining low, this is looming ever greater in our considerations. Nonetheless, continuing to hedge currency risks makes perfect sense.
Die Suva spielt für den Arbeitsfrieden in der Schweiz eine wichtige Rolle.
There is one megatrend that affects Suva directly: Switzerland is moving ever more towards becoming a service industry; the number of jobs in the industrial sector is declining and Suva’s market is shrinking.
Dürr: This is true. Suva is facing a strategic dilemma.
Weber: The revision of the Federal Act on Accident Insurance (AIA), which came into force at the start of the year, leaves us with few strategic options for compensating for this decline in secondary industries. It goes without saying that we cannot suddenly sell material assets or offer our services in a different country. The law clearly defines which industries are insured with us. We have little room for manoeuvre, and we’re trapped in this strategic dilemma until the next time the AIA is revised.
Dürr: We have waited for this revision of the AIA for ten years. It would make sense for Suva to be responsible for all companies in the healthcare sector. Sadly, Parliament came to a different decision. Obviously we must abide by the law when it comes to the industries that can be insured with Suva. But at least we have certainty for planning purposes – and this certainty has also enabled us to try out our new strategy.
What are the most important elements of this strategy?
Dürr: We are using it to react to megatrends, as you called them earlier: our shrinking market share, low and negative interest rates, digitalisation and the increasing number of leisure-time accidents. To put it simply, we are looking at where we may have been concentrating our resources disproportionately.
Weber: Digitalisation is also an opportunity – for example, it enables us to process claims more efficiently. In the past, we rolled out digitalisation selectively. In future, we must take a completely new, digital approach to our business model and to individual processes. Our new “avance” strategy also gives us an opportunity to play our unique trump card: we offer prevention, insurance and rehabilitation all under one roof and all coordinated with one another.
The number of occupational accidents has been decreasing for years, while the number of leisure-time accidents is on the up. What does that mean for you, the largest accident insurer?
Weber: In future, our activities must centre around holistic prevention to an even greater degree. What this means for us is that we no longer focus primarily on occupational accidents, but also on leisure-time accidents. In future, we want to support companies in implementing corporate health management that ranges from prevention modules to absence management. This is one of the secondary activities that we are now allowed to offer under the new Accident Insurance Act.
Dürr: The number of occupational accidents is of course decreasing, thanks in part to Suva’s efforts. In our prevention programmes, we work intensively with the insured industries and companies.
Weber: We are working – particularly with apprentices – to make sure that this culture of safety that we foster within companies also carries over into leisure time, for instance when someone picks up a drill at home or practises sport in their free time. To give an exaggerated example, we hope that people ask themselves whether it’s really a good idea to hurtle down steep roads on rollerblades while wearing swimming trunks.
Late last year you hit the headlines with your decision to stop using detectives in your anti-fraud measures for the time being. The European Court of Human Rights found that there were insufficient legal grounds for their deployment. How are things proceeding now?
Dürr: We hope that the law will be changed as soon as possible. That’s what everyone wants. It is simply incomprehensible that anyone could deceive a social insurance company and escape punishment.
Weber: Suva prepared a proposal for the Federal Social Insurance Office on creating a legal foundation for the use of insurance detectives. But you have to look at it in relative terms too: in the last year, we processed 950 suspected cases and used detectives in a total of nine operations. This shows that we only deploy our detectives if all other avenues have been exhausted without returning any definitive evidence. Detectives are a last resort.
Has the fight against insurance fraud paid off from a financial perspective?
Weber: Combating insurance fraud has both material and intangible benefits. People must be aware that Suva studies all circumstances very closely; this has a preventive effect and gives people certainty that their premiums are not being misused. We currently employ 13 people to investigate suspected cases. We find evidence of fraud in around four out of ten cases investigated. In 2016, our activities in this area led to savings of around 18 million Swiss francs. Thanks to feedback from our customers and discussions on social media, we also know that there is a high degree of awareness in society that we are tackling insurance fraud.
Suva will be 100 years old next year. You have already talked about your strategic dilemma with the shrinking market share. To ask a provocative question, for how long will there still be a need for Suva to exist?
Dürr: The Suva model is very successful and there will be a need for it to exist well into the future. It protects employees – and employers don’t want accidents in their businesses either, as this is associated with suffering and high costs. The peaceful industrial relations that are so important in Switzerland depend largely on the left hand and the right hand being able to talk to one another and get to know one another personally. Suva plays an important part here. Finally, it belongs to the insurees, in other words the social partners, who share the number of seats equally on the Board of Directors.
Weber: To ensure our continued success in the future, we must identify in good time the challenges that are heading our way. Ten years from now, many prevention issues will look completely different: you just have to think about self-driving cars or automation in businesses, for example. We must continue to focus our model of prevention, insurance and rehabilitation on the new risks we face.
Daniel Ammann has been a journalist and author for many years. He also used to head the economics department at “Die Weltwoche”. He has received numerous awards for his work. He is now a partner of the communications agency Ammann, Brunner & Krobath AG in Zurich.
Wir müssen einzelne Prozesse ganz neu und digital denken.
Daniel Ammann ist langjähriger Journalist und Buchautor. Er leitete unter anderem das Wirtschaftsressort der «Weltwoche». Für seine Arbeit wurde er mehrfach ausgezeichnet. Heute ist er Partner der Kommunikationsagentur Ammann, Brunner & Krobath AG in Zürich.