Administrative costs of health insurers

What are the administrative costs of health insurers?

Administrative costs are all of a health insurer’s costs that do not arise directly from the treatment of its insured persons. They include staff salaries, IT and buildings, checking and processing invoices, customer service, supervision and auditing, advertising and the remuneration of intermediaries.

For basic health insurance, these costs are limited by law, and the Federal Office of Public Health (FOPH) publishes them every year for each insurer. Health insurers must record them separately: basic health insurance, daily allowance insurance and supplementary insurance each have their own administrative costs. This means an insurer cannot finance the administration of supplementary insurance from basic health insurance premiums.

Administrative costs must be distinguished from healthcare costs. Healthcare costs are the bills from doctors, hospitals, pharmacies and therapists. They make up by far the largest part of the premium.

How it works

Every insurer shows in its annual accounts how much it spent on administration. The FOPH collects these figures in its supervisory data (table T 5.01) and converts them into amounts per insured person. This makes it possible to compare insurers of different sizes.

Source: FOPH, supervisory data on compulsory health insurance (T 5.01), data as of 22.05.2025.

In francs, administrative expenses per person have risen since 2014, but as a share of expenditure they have fallen, because the cost of benefits grew faster. The differences between insurers are large: among the 34 insurers operating in 2026, the figure for 2024 ranged from CHF 95.21 to CHF 513.94 per insured person.

Administrative costs are built into the premium. In the premium approval process, the FOPH checks whether the estimated income covers all the estimated expenditure, including administration. For models such as the HMO or GP model, the insurer must also include administrative costs in the premium (Art. 101 para. 1 KVV).

Legal basis

Art. 19 para. 1 of the Health Insurance Supervision Act (KVAG) requires insurers to limit the administrative costs of social health insurance to what is necessary for economical management. Administrative costs expressly include the costs of intermediary activities and advertising. Under Art. 19 para. 2 KVAG, the insurer shows its spending on advertising and intermediary commissions separately in its annual accounts.

Art. 34 of the Health Insurance Supervision Ordinance (KVAV) requires administrative costs to be allocated to basic health insurance, daily allowance insurance and supplementary insurance according to the actual expenditure. Art. 35 para. 2 KVAV defines advertising costs as all expenditure on acquiring insured persons, regardless of the channel. In addition, since 01.09.2024, the remuneration of intermediaries in basic health insurance has been limited to a maximum of CHF 70 per insured person (Art. 35b KVAV with Annex 2).

Example: administration and benefits compared

For 2024, the FOPH reports the following figures per insured person in basic health insurance (supervisory data T 5.01):

What this means for you

Administrative costs are an indication of how efficiently an insurer works. For your choice, however, they are only one factor among several. What matters is the premium where you live, which you can compare in the premium calculator.

In the profiles under health insurers, you will find each insurer’s administrative expenses per person compared with the sector, as well as reserves, solvency and loss ratio. One example is the CSS profile. The reserves show how sound an insurer’s finances are. How we prepare the key figures is explained under How we calculate.

Common mistakes

• Thinking administrative costs are the main reason for rising premiums. They accounted for 4.51% of expenditure in 2024; most of it is the cost of benefits.
• Choosing an insurer only on the basis of administrative costs. An insurer with low administrative expenses can still have a higher premium where you live.
• Mixing up basic and supplementary insurance. The FOPH figures only concern basic health insurance; the administration of supplementary insurance is accounted for separately.