Health insurers’ reserves

What are health insurers’ reserves?

Reserves are a health insurer’s financial cushion in basic health insurance. Technically, they are the difference between the value of its assets, i.e. investments and receivables, and the value of its liabilities, for example doctors’ bills that have not yet been paid. You can think of them as the equity capital of a company, except that they serve basic health insurance exclusively.

Reserves are not the same as provisions. Provisions are money that the insurer sets aside for treatment that has already taken place but has not yet been billed. Reserves come on top and cover unexpected events: a flu epidemic, a sharper rise in costs than planned or losses on the financial markets.

Basic health insurance reserves are strictly separate from those of supplementary insurance. Items from business under the Insurance Contract Act (VVG/ICA) are not included in the calculation. An insurer may therefore not use basic health insurance money to cover losses in supplementary insurance.

How it works

At the beginning of each calendar year, every health insurer determines its available reserves and the minimum level it needs. The minimum level is calculated by the KVG solvency test. It estimates the insurer’s insurance risks, market risks and credit risks. The minimum level is set so that, on average across the worst 1% of all possible courses of a year, the reserves do not fall below zero.

The ratio between available reserves and the minimum level is called the solvency ratio. At 100%, the insurer just meets the requirement. If it is below that, the insurer must report this to the FOPH (Federal Office of Public Health) as the supervisory authority.

Reserves are built up from surpluses: if an insurer takes in more premiums than it spends on benefits and administration, or makes investment gains, its reserves grow. They shrink when costs exceed premiums.

Reserves that are too high are not desirable either. The FOPH refuses premiums that lead to excessive reserves. An insurer can reduce reserves voluntarily: it then sets premiums tightly and can distribute a compensatory amount to insured persons. It deducts this from the approved premium and shows it separately on the premium invoice. This must be distinguished from the compensation for excessive premium income in a canton, the premium refund.

Legal basis

Art. 14 para. 1 of the Health Insurance Supervision Act (KVAG) requires health insurers to build up sufficient reserves to ensure their solvency. Under para. 2, the Federal Council specifies a model for determining the minimum level, based on insurance risks, market risks and credit risks. Under Art. 56 KVAG, supervision is exercised by the FOPH. Under Art. 63 let. b of the Health Insurance Supervision Ordinance (KVAV), reserves below the minimum level are a reportable event.

The details are set out in the KVAV. Art. 9 KVAV requires a new insurer to have initial reserves of at least CHF 8 million. Art. 10 KVAV defines reserves as the difference between assets and liabilities, excluding business under the VVG (para. 4). Art. 11 KVAV sets the minimum level, and Art. 12 KVAV the annual determination at the beginning of the calendar year.

Art. 16 para. 4 let. d KVAG prohibits the approval of premiums that lead to excessive reserves. What counts as excessive is set out in Art. 25 para. 5 KVAV: when the minimum level is also covered in the long term with lower reserves. Voluntary reduction with a compensatory amount is governed by Art. 26 KVAV. Compensation for excessive premium income in a canton is governed by Art. 17 and 18 KVAG; under Art. 31 KVAV, the insurer must then still have reserves of more than 150% of the minimum level.

Example: the industry’s solvency ratio in 2025

The FOPH publishes the results of the solvency test every year on Priminfo. As at the reference date of 01.01.2025, the figures for all insurers together are as follows:

Key figure	Value
Available reserves	CHF 7,772.0 million
Minimum level of reserves	CHF 5,294.2 million
Reserves above the minimum level	CHF 2,477.8 million
Industry solvency ratio 2025	147%
Industry solvency ratio 2024	121%

To refund excessive premium income, an insurer must have more than 150% of the minimum level after the compensation. At 147%, the industry average in 2025 was just below that.

What this means for you

Reserves are a key figure for the financial stability of your health insurer. When choosing basic health insurance, three considerations will help you:

1. Check the solvency ratio. A ratio just above 100% means that the insurer has little buffer. If an expensive year comes along, the risk of a sharp premium increase rises.
2. Benefits stay the same. The benefits of basic health insurance are identical at all insurers. If an insurer fails, the Common Institution under the Federal Health Insurance Act covers the costs of the statutory benefits through its insolvency fund.
3. Look at premium and stability together. Compare the 2026 premiums in the premium calculator and the insurers’ key figures under Health insurers.

If you want to switch insurer for this reason, the usual cancellation deadlines apply; everything you need to know is under Switching. We explain how we present key figures under How we calculate. How reserves relate to risk equalisation is covered in a separate entry.

Common mistakes

• Confusing reserves with profit. Health insurers may not distribute profits in basic health insurance; surpluses go into the reserves.
• Seeing high reserves as a guarantee of low premiums. The premium must cover costs; reserves only cushion fluctuations.
• Applying industry figures to your own insurer. The ratio ranges from below 100% to well above it. What counts is your insurer’s figure.
• Including supplementary insurance reserves. Basic health insurance reserves are separate; business under the VVG does not count.