Switzerland only faces a medium level of earthquake risk but a large potential for high costs due to urban density
Switzerland’s National Council approved of a bill that creates a mandatory earthquake insurance scheme in the country. It is now left to the Federal Council to implement the new measure.
The bill could be good news for Swiss companies and is widely supported by Association Suisse d’Assurances, ASA, the Swiss insurance association and Etablissements Cantonaux d’Assurances, which represents regional insurance companies.
The Swiss Association of Insurance and Risk Managers, SIRM, has not made a public statement on the bill yet, but has previously supported similar initiatives. As a result of the measure, companies that already purchase insurance protection for seismic risks could find a reduction in premium prices.
Switzerland only faces a medium level of earthquake risk but a large potential for high costs due to urban density within the country, said ASA. If Switzerland’s federal government implements the law all companies and individuals who own a property will have to take out cover.
Switzerland only faces a medium level of earthquake risk
The measure are meant to help harmonise the needs of insurance coverages for earthquake risk across the country. Companies will be able to buy one policy for all parts of their operations.
Currently most insurance legislation is decided in Switzerland at the cantonal level and companies often need to negotiate different coverages across the several cantons in which they operate. Out of 26 Swiss cantons, 19 have laws that institute mandatory insurance coverage for fire and natural catastrophes, excluding quakes.
ASA mentioned that no further legal changes are needed to implement the new mandatory insurance scheme throughout the country, saying that it could be in place quickly once the federal government gives insurers the green light.
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