I frequently find myself telling employers that the CBS is a tool that allows them to make sure that every social franc is well spent. In Switzerland, Swiss Risk & Care is the only expert broker to offer such an approach. This is a surprise, because this type of approach has existed in other countries for a long time. In Switzerland, the only official document that gives information on the status of an insured party is the pension fund certificate, which an employee receives every year. Old age and survivors' insurance or accident insurance does not follow the same principle. To cover a potential incident – whether a death, disability, or retirement – the employer is faced with four or five different insurers, which will all take action. Instead of dividing up the process, the BSE takes an overall approach. Taking into account the family and personal circumstances of each employee, it aims to identify where potential waste or gaps come into play.
In Switzerland, it's very rare for people to be concerned about whether the organisation of different insurance providers runs smoothly. Pension funds, for example, exist in a completely different world from the company. If a disability occurs following an accident, disability insurance pays benefits first, after which others may pay benefits: compulsory accident insurance, supplemental insurance, and finally, in some cases, pension funds. In some cases, almost all benefits are paid by disability insurance, with the accident insurer only paying a supplement. As a result, in general, a disability following an accident is very widely covered by the first pillar and by compulsory accident insurance. The pension fund is often inactive. Naturally, following a disability, one can only earn by working. In short, in such cases, between disability insurance, compulsory accident insurance, supplementary accident insurance and the second pillar, the employer makes four contributions, while in the end the employee cannot receive more than 100% of his salary. Hence potential savings for companies and employees may exist. Note also that savings are only possible in cases of accidents. Depending on what is provided in the settlement of the pension fund, it is also the case following an illness.
We can, for example, notice that the consequences of an accident are overly insured, while the reverse is true in cases of illness or that certain categories of people, depending on their family or salary situation, are generally better covered than others. Keep in mind that I am not saying that insurers are thieves... It’s that the system is complex. We all have our job to do. I am however surprised that the issue of organisation is not further addressed. Especially since the savings for businesses can be significant. For example, we have helped one of our clients save several million francs per year as a result of the Corporate’s Benefit Statement.
One of the main difficulties in this field is that experts do not talk among themselves, especially occupational benefits specialists and brokers. This prevents employers and employees from benefiting from a clear vision of their own social coverages. In Switzerland, this problem is exacerbated by the fact that pensions and the business are entirely separate from a legal point of view. These two areas do not communicate. In the area of social coverage management, we at Swiss Risk & Care have a major advantage because we have been combining the expertise of the broker with that of the occupational benefits specialist (actuary) for the last 25 years.
hpr, a member of our group of which I am a co-founder, has provided this approach for twenty-eight years. In addition to our experience, we have a computer application capable of performing sophisticated calculations. So far, however, we use this expertise primarily in Individual Benefits Statements (BSI). Initially we have developed this service because employers wanted to provide information to their employees. About two years ago, we thought that, rather than answering questions from insured parties, we could provide information to the employer itself so that it can take action going forward.
It’s a very complicated job. If we're the only ones to offer this service in Switzerland, this is particularly due to the computational complexity and the wide range of possible situations. Initially, we had to create our own digital application, then enter the data for all laws in Switzerland, as well as the calculation of old age and survivors' insurance annuities, disability insurance, accident insurance, second pillar, and complimentary insurance. All legal parameters were added to calculate the coordination rules. Calculations can also be customised on two levels: the company level and the individual level depending on age, family status, gender, or income. These complex calculations are carried out by our teams of actuaries, often called "insurance engineers." Ultimately, we can identify the overall level of cover of the insured party, based on a wide array of scenarios. When applying these results to an entire workforce, we can pretty quickly see where waste and over-insurance are taking place, and also find potential cover gaps.
This is not our intention by any means. The advantage to companies, but also for employees, is that it avoids waste without reducing social benefits. We simply tell employers that, under the current system, they tend to over-insure by contributing to too many pots. We feel that a comprehensive Corporate Benefit Statement analysis allows companies to identify what they pay each insurer and see what each insurer would actually pay in the event of death, disability, or retirement. Employers can the correct factors moving forward in such a way that every franc spent for social purposes is spent wisely. From my point of view, a broker today who works without this tool is only getting half the job done.
The Corporate Benefit Statement