Riski & nsu Rance insight 2018...The Swiss National Bank kept its interest rate on sight deposits at –0.75%. Switzerland was once again ranked as the world’s most competitive economy

Securing the competitive edge.

Risk & insuRance insight 2018

2 Risk & insurance insight 2018 Risk & insurance insight 2018 3

cOntents

editorial 5

annual report 6

management Seminar 20

KeSSler academy 22

penSion fund management – douglaS müller 26

cyber riSKS – helmut Studer 27

global riSKS – roger Konrad 28

Special riSKS – paScal Schweingruber 29

weStern Switzerland – bernard perritaz 30

riSK conSulting – Simon Künzler 31

SiteS 32

all ServiceS from a Single Source – Comprehensive risk and

insurance analyses and advice

– Risk and insurance policy models and integrated solutions

– Creating and placing tailored, innovative insurance solutions

– Comprehensive management spanning all insurance sectors

– Legal advice, support and assistance in the event of a claim

– Access via KesslerOnline – Leading advisor for financial loss cover – Modern risk financing, captive studies

and captive management – Due diligence and transaction solutions

for company acquisitions and divestments – Employee benefits consulting and coordination

imageryOur employees work hard for our clients every single day. They also make up a strong team outside of work and demonstrated great endurance, motivation and camaraderie as the Kessler team at the Swiss Company Triathlon 2017 in Zurich.

kessleR pROvides Risk, insuRance and pensiOn fund cOnsulting seRvices fOR cORpORate clients in the seRvices, Retail and industRial sectORs, and the public sectOR.


Dear clients, partners, employees and friends of Kessler,

Switzerland is characterized by political stability and a sound economic situation. We are among the most competitive countries in the world and have an excellent reputation. Our economy is strongly intertwined with international markets. Open borders and stable bilateral agreements with the EU are essential for our prosperity.

Following two negative referendums, the reforms for corporate tax and pensions are still pending. Given the growing international tax competition and our relationship with the EU, a new Tax Proposal 17 capable of winning majority support is essential. More time will need to be dedicated to the pension reform, with AHV first requiring restructuring, before occupational pensions can then be tackled.

The WEF Global Risks Report 2018 shows that cyberattacks are perceived as one of the biggest threats. Every organization must protect itself accordingly, not just because of stricter data protection laws. We help our cli-ents identify and assess cyber risks, initiate the necessary measures for prevention and insure residual risks.

“Securing the competitive edge” is our claim. The company is well on course and currently transitioning from the third to the fourth generation. The younger Executive Committee has been focusing on digitalization in insurance so as to be equipped to face future challenges.

We thank you for your trust and hope you enjoy the read.

editORial

Martin E. Kessler Robert Kessler Tom Kessler Christian KesslerChairman of the CEO Member of the Member of theBoard of Directors Executive Committee Executive Committee

martin e. Kessler tom Kessler christian Kessler robert Kessler


political, economic and regulatory environmentSwitzerland is characterized by political stability and a sound economic situation. The weakening of the Swiss franc in relation to the euro has contributed to the positive climate. Gross domestic product (GDP) increased by around 1%, while inflation was at 0.5% on average for the year. The annual average for un-employment was 3.2%. The Swiss National Bank kept its interest rate on sight deposits at –0.75%.

Switzerland was once again ranked as the world’s most competitive economy by the World Economic Forum (WEF).

Our economy is more strongly intertwined with in-ternational markets than ever. Foreign trade, meaning total imports and exports of goods and services, has risen to more than 120% of GDP in recent years. It was therefore imperative that the Swiss mass immigration initiative was implemented in a compatible way through bilateral treaties between Switzerland and the European Union (EU). The cor-porate tax reform was rejected, and a new proposal is currently being drafted. It is important for the status of Switzerland as a business location that this is im-plemented soon, especially against the backdrop of the major corporate tax cuts in the USA.

For insurance companies, 2017 was dominated by major natural disasters. According to estimates from Swiss Re and Munich Re, this will be the most expensive year ever for insurance worldwide, with insurance claims amounting to approximately USD 135 billion. The principal causes were the severe hur-ricanes that devastated the Caribbean and the East Coast of the USA.

annual RepORtOuR YeaR

political tensions and acts of war continue to dominate in various regions around the world. the geopolitical situation is uncertain, and the debt problem in europe has not been resolved. on the plus side, the world economy is recovering around the globe – as reflected in strong stock markets in 2017.

the weakening Of the swiss fRanc in RelatiOn tO the euRO has cOntRibuted tO the pOsitive climate.

each daY bRings new challenges. taking them On tOgetheR as a team challenges and mOtivates us.


switzeRland was Once again Ranked as the wORld’s mOst cOmpetitive ecOnOmY bY the wORld ecOnOmic fORum (wef).

Digitalization in the insurance sector and startups in the area of fintech/insurtech are omnipresent. We are also evaluating the opportunities these new technologies offer for the client segment of small businesses. In this respect, the business model of the insurance broker has proved to be challenging, as we are having to automate two interfaces – one to clients and one to insurance companies. Most start-ups are focusing their attention on the client inter-face, which is why digitalization is advancing more quickly in B2C than in B2B.

SwiSS penSion SyStem The demographic trend of increasing life expectancy coupled with persistently low interest rates requires changes to the Swiss pension system. The Pension Reform 2020 package, which was designed to fully reform Pillars 1 and 2 of the pension system, was rejected in a referendum. This has led to a substan-tial reform backlog. Additional income is urgently needed in AHV. In Pillar 2, the current conversion rate of 6.8% means that more than CHF 1,000 is deducted from each active contributor per year and allocated to those newly entering retirement. The new AHV proposal is expected to be implemented by 2021, while the reform of Pillar 2 will take another three to five years thereafter.

fidlegA new Financial Services Act (FinSA) is intended to strengthen consumer protection in the distribution of investment products. The parliamentary consul-tation is at an advanced stage. It is now certain that

insurance will be excluded from the FinSA. Amend-ments are required to the already strict insurance laws (VVG, VAG, BVG, KVG, etc.). Last summer, the Federal Department of Finance (FDF) therefore es-tablished a working group made up of industry repre-sentatives, which also included the Swiss Insurance Brokers Association (SIBA). The necessary changes will be developed in the course of a partial revision of the Insurance Supervision Act (VAG). This includes regulations on redeemable life insurance policies, enhancing abuse supervision in insurance media- tion by the Swiss Financial Market Supervisory Authority (FINMA) as well as an obligation to provide training and further education.

at kessleR, we wORk in clOse cOOpeRatiOn as specialized teams. this enables us tO OffeR OuR clients the best-pOssible sOlutiOn fOR theiR sectOR.


inSurance broKerSIn August 2017, the FINMA register included 16,250 insurance brokers, around 1,950 of which are legal entities (AG, GmbH, etc.) and 14,300 natural per-sons. Of these natural persons, 55 percent are as-sociated intermediaries, i.e. agents and insurance representatives. 45 percent or some 6,400 are inde-pendent intermediaries, i.e. insurance brokers.

The market share of professional brokers among medium-sized and large commercial clients is 90%. Independent insurance brokerage is an established profession, the market is distributed and competi-tion is fierce. The Swiss Insurance Brokers Associ-ation (SIBA) comprises the top 80 insurance brokers in Switzerland, covering some 2,000 employees. The association’s main duty is to represent the interests

of the sector in order to ensure an appropriate regu-latory environment for the brokerage profession.

ServiceS and clientSKessler pursues the following corporate vision: “We are the Swiss leader in risk, insurance and pension fund consulting and Switzerland’s leading partner in the globally active Marsh network. We create sus-tainable added value for our clients by virtue of our market position, innovative strength, and the exper-tise and experience of our employees. Our good rep-utation and economic success secure our long-term future as an independent family business.” We pro-vide risk, insurance and pension fund consulting ser-vices for corporate clients in the services, retail and industrial sectors, and the public sector. Our product and market strategy is focused on the comprehensive management of companies with 100 employees or more. These number around 4,500 private-sector companies and 500 organizations working in the public sector. Kessler works with around 1,150 of these 5,000 target clients, which corresponds to a market penetration of 23%.

We have a business relationship with 45 of Switzerland’s top 100 companies and with a third of its top 500 companies. We mainly advise medium-sized companies: of our total 1,150 clients, 750 em-ploy between 100 and 250 staff, 250 between 250 and 750 staff, and 150 more than 750. Measured in terms of revenue from brokerage and fees, we have a market share of around 15% in this segment.

OuR gOOd ReputatiOn and ecOnOmic success secuRe OuR lOng-teRm futuRe as an independent familY business.

Reaching taRgets and measuRing OuRselves against the peRfORmance Of OtheRs is bOth OuR mOtivatiOn and incentive. we see it as a spORting ObligatiOn tO JustifY the cOnfidence placed in us bY team paRtneRs.


Our advisory service begins with a risk, insurance and pension fund analysis. Modern risk manage-ment requires in-depth risk identification and eval-uation, and optimizes the prevention, insurance and acceptance of risks. The objective is to minimize the total cost of risk (TCOR) – for which we offer spe-cial risk consulting services. The more in-depth we address the potential threats of the future, the more specialized our consulting becomes.

We help our clients create a company-specific risk and insurance management policy. Insurance based on the large loss principle is advisable, even if large claims are very unlikely. In accordance with the principle of interest, it is to the company’s benefit to bear more frequent, minor losses itself. This provides the incentive for avoidance. We design tailored insurance solutions and place the cover on the insurance market. We advise our clients on an ongoing basis and also offer them support if a loss event occurs.

Cyber risks are a particularly important issue at the moment. The growing dependence on the Internet and stricter data protection laws in the EU as well as within the framework of the ongoing revision of the Swiss Data Protection Act in Switzerland all mean that cyber risks will undoubtedly become a key topic in future. When it comes to cyber security, solutions must be found in both the public and private sectors.

In the year under review, we held an innovation com-petition to find new solutions. From the many ideas

submitted, two larger projects have been chosen for implementation: systematic risk dialog with our clients and new types of “all-risk” business interruption insurance.

We keep our clients up-to-date on current issues with the publication of Risk & Insurance Insight, D&O Message and Market View. Our Kessler Acade-my offers decision makers in business education and training on risk, insurance and pension fund issues.

Client satisfaction is our top priority. For the compa-ny, the divisions and each individual employee, it is top left in the balanced scorecard (BSC). Kessler has maintained its client retention rate at a high level of

when it cOmes tO cYbeR secuRitY, sOlutiOns must be fOund in bOth the public and pRivate sectORs.

we aRe paRtneRs On eQual teRms and wORk clOselY with OuR clients. it is OuR aim tO keep ReaffiRming the tRust that is placed in us.


to coincide with the WEF 2017 Global Risks Report attracted C-level clients and prospects.

Marsh and Kessler have an intense business relationship. We use the Marsh Network to provide local support to the foreign group companies of our more than 100 Swiss multinational clients. We act as the Marsh Network’s Swiss partner and support just un-der 500 subsidiaries of foreign companies in Swit-zerland. We work on a daily basis with just under 70 Marsh offices worldwide. Thanks to the strength of the Swiss economy abroad, the business volume contributed to the Marsh Network exceeds that of incoming business.

In spring, we took over pension fund administra-tion from Mercer, with 40 clients and 17 employees. By consolidating the client portfolio, we have estab-lished international expertise, synergy effects and development opportunities for staff. We have been working with Mercer for many years as part of MMB Mercer Marsh Benefits and in other complementary business areas.

employeeSAs at the end of 2017, Kessler had 272 (prior year: 254) employees in addition to six apprentices and interns and a number of temporary staff. This equates to 252 (prior year: 232) FTEs. Two-thirds of our staff work at head office in Zurich, just under 60 in Lausanne, 15 in Geneva, 15 in Berne and 10 in St. Gallen. One to three employees work in each of our regional offi-ces in Aarau, Basel, Lucerne, Neuchâtel and Vaduz.

180 of our employees are entered in the FINMA register as independent insurance intermediaries.

We use the BSC with the four dimensions of client results & market success, employee abilities, effec-tive business processes and financial success for set-ting objectives and performance management at the overall company level, in our client-facing activities and at the individual employee level.

Well-trained, motivated and trustworthy employees are the key to every service provider’s success. Our education and training takes the form of on-the-job training and the attendance of internal and external courses. It is organizationally the responsibility of the Kessler Academy and covers the specialist fields of risk management, insurance and occupational benefits. It also embraces working technology, IT, languages, conducting negotiations, managing staff and personal development.

maRsh and kessleR have an intense business RelatiOnship.

our clients include around 1,150 of the 4,500 leading Swiss private companies and 500 public sector institutions.

measured in terms of revenue from broke-rage and fees, we have a market share of around 15% in this segment.

our client retention rate has remained at around 97% for over ten years.

23%marKet penetration

97%cuStomer retention rate

15%marKet Share

97.3%, which is an excellent result given the competitive environment.

marShMarsh & McLennan Companies (Marsh, Mercer, Guy Carpenter, Oliver Wyman) have grown very suc-cessfully for years with a workforce of 60,000 and annual revenue in excess of USD 13 billion. Marsh

reports continuous growth and sound operating re-sults. We are working closely with European man-agement and are represented on various specialist teams (Marsh practice groups), where expertise and new innovative client solutions are discussed. In Edwin Charnaud, we have a dedicated member of the Board of Directors who provides us with invaluable support. The MMC events held in Zurich and Geneva


deliveRing tOp Results calls fOR maXimum cOmmitment. OnlY with eXpeRience, peRseveRance and willpOweR can new levels Of tOp peRfORmance be achieved time and again.

Our career model allows our top performers to fully exploit their abilities and make the most of profes-sional opportunities. The strong weighting of per-formance-based remuneration has proven its worth in the sector.

inSurerSAs the market leader, we are recognized for our pro-fessional services, which not only relieve the pressure on clients, but also insurance companies. Insurers see their responsibilities as providing underwriting and claims settlement services. Developing, sup-

porting and advising medium-sized and large com-mercial clients are down to the professional insur-ance broker.

On the whole, the collaboration with insurers can be described as good. They are also feeling the effects of the challenging market environment. Some of the larger claims are only being dealt with slowly and af-ter tough negotiations.

For property and liability insurance, the environ-ment is still client-friendly with premium reduc-tions available. Only the premiums for natural disas-ter coverage have risen in the wake of major global losses. In personal insurance, the market is difficult. Daily sickness benefits insurers are consistently restructuring policies with poor claims histories.

However, the greatest problems for insurance com-panies are the low interest rates and declining in-vestment income. Full BVG coverage is now only being offered by few insurers, and generally only for younger workforces and small companies. Life in-surers are increasingly transferring the investment risk to insured members through semi-autonomous solutions. The reform backlog will only intensify these trends in the coming years.

In the main, the results of insurers developed en-couragingly. Credit rating is the top criterion of our placement policy. The solvency of insurers licensed in Switzerland has been stable. Our Market Securi-ty Committee (MSC) monitors risk carriers, i.e. in-

OuR educatiOn and tRaining takes the fORm Of On-the-JOb tRaining and the attendance Of inteRnal and eXteRnal cOuRses.


surers and pension foundations. We are working in close partnership with our colleagues at Marsh.

outlooK and thanKSThere is widespread recognition of our position as the leading Swiss company for risk, insurance and pen-sions advice in terms of quality, reputation, size and earnings. As the Swiss partner in the worldwide Marsh Network, we are also well-placed interna-tionally.

The claim of our family company is “securing the competitive edge”. We are currently transitioning from the third to the fourth generation. Christian Kessler and Tom Kessler are assuming responsibility, as members of the Executive Committee.

The fierce competition in insurance will further enhance the margin pressure for insurance compa-nies and brokers. We are exploiting the advantages of digitalization and intend to be less complex, more innovative and faster in our work.

We are an experienced, motivated and stable team. Our services continue to be in demand. Despite the geopolitical risks, we can be positive as we look to the future.

We would like to thank our clients, partners and em-ployees for the effective and trusting collaboration over the past year. Everyone has played their part in the success of Kessler.

we aRe eXplOiting the advantages Of digitalizatiOn and intend tO be less cOmpleX, mORe innOvative and fasteR in OuR wORk.fOR us, this means tOtal dedicatiOn tO cOntRibuting

OuR full eXpeRience and cOmpRehensive eXpeRtise tO the benefit Of OuR clients eveRY single daY.


management seminaRlilienbeRg 2017

management Seminar in lilienberg, September 2017once a year, Kessler’s executive staff meet for closed-door meeting. in 2017 the meeting took place in lilienberg and was dedicated to the topic “stronger in sales“.

1 bernard perritaz, 2 Silvano di felice, 3 werner niederberger, 4 rolf wenzl, 5 edwin Krebser, 6 mario vegetti, 7 Klaus peretti, 8 Simon Künzler, 9 Sylvain zuber, 10 dominik grond, 11 tom Kessler, 12 urs Sommer, 13 Jürg Spescha, 14 riccardo tondo, 15 christian peters, 16 Stefan leuenberger, 17 claudio roa, 18 helmut Studer, 19 ziliante mariotti, 20 christian Kessler, 21 robert Kessler, 22 roy hiltebrand, 23 pascal praudisch, 24 ronald flükiger, 25 douglas müller, 26 andré Scheidt, 27 pascal Schweingruber, 28 markus Singer, 29 emmanuel anrig, 30 urs huber, 31 Stéphane etter, 32 werner moser, 33 beatrix bock, 34 roger Konrad, 35 Samuel egger, 36 heinrich wolf, 37 Katja wodiunig, 38 andreas Stocker, 39 Kurt vogel, 40 yves Krismer, 41 Sandra müller, 42 martin e. Kessler, 43 christian brinkmann, 44 cécile baptiste, 45 peter Kadar, 46 hans-christian Süss, 47 peter dürig, 48 rüdiger nickelsen, 49 martin rohrbach, 50 christophe tribolet, 51 luy nguyen tang. members of management who are not in the picture: gerhard niederhauser.

1 2 3 4 5 76 8 9 10 11 12 13 14 1615 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 5049 51


the SpeaKerSThe biggest challenge at the outset was that we wan-ted to have only our own as speakers at the Kessler Academy. Our insurance line specialists and practice leaders are the absolute best in their fields and are skilled at getting their point across in consultations. It is something totally different to speak to a group of CFOs in a captivating, clear and interactive way.

Nonetheless, willingness was high. “I was delighted to see such great drive and dedication from the future speakers,” says Pascal Schweingruber. “We organized training and trial runs, from which we learned a great deal – about ourselves, our impact, but also the work of our colleagues.”

“It was already apparent after the first year that we had created something for which there was clearly real demand. Feedback was also overwhelmingly positive,” Tom Kessler sums up. “That is why we have decided to also offer the Academy in French-speak-ing Switzerland.” The first Kessler Academy took place in Lausanne in November 2014 and it has since been an integral part of the program.

kessleR academYfive YeaRs Of the kessleR academY

Since 2013, we have been offering decision makers in business the opportunity to receive training in risk management, insurance and occupational benefits at the Kessler academy. “in order for participants to derive the greatest benefit, we tailor the Kessler academy to the individual functions of a company,” comments tom Kessler. we have offers for human resources managers, cfos and board members.

“it was alReadY appaRent afteR the fiRst YeaR that we had cReated sOmething fOR which theRe was cleaRlY Real demand. feedback was alsO OveR-whelminglY pOsitive.” tOm kessleR


kessleR academY

demand iS riSing“The Academy quickly gained recognition and we increasingly had to turn people away. For this reason, we also opened the Academy for non-clients in the same year,” explains Tom Kessler. Pascal Schwein-gruber adds: “Since then, the composition of parti-cipants has been mixed and everyone benefits from the knowledge of the speakers as well as discussions with others. By limiting the sessions to 20 parti-cipants, the Kessler Academy is different to many other events and is at the same time improving quality.”

Tom Kessler has the following to say about future plans: “In 2018, we will be offering our first ever course for insurance officers. Our contacts for insur-ance in companies are commonly from operations or executive departments. For most, insurance is something they oversee on the side. With our new entry level course, beginners can quickly gain an overview of the insurance available to companies. The first course will take place in Zurich on August 23 and will deal with employee insurance; it is aimed at staff in human resources, remuneration and bene-fits as well as payroll.”

“bY limiting the sessiOns tO 20 paRtici-pants, the kessleR academY is diffeRent tO manY OtheR events and is at the same time impROving QualitY.”pascal schweingRubeR


douglaS müllermember of the executive committee

pensiOn fund managementthe lOng ROad tO success

In my 27 years at Kessler, I can honestly say that 2017 was probably the most exciting year so far, with a number of achievements and stories to speak of. There is one that particularly stands out:

in 1996, Kessler acquired a competitor for the first time and consequently gained a foothold in French-speaking Switzerland. Barins Management, as this company was called, convinced me that we should sell its pension scheme administration service to our clients in the German part of Switzerland. On January 1, 2000, we started with one employee, two clients and the IT solution for technical administration as offered by Barins Management. Business started out well and could soon not be managed by just one employee in Zurich with seven foundations

as well as client acquisition. At the start of 2010, we brought the entire business together, first in Geneva and later in Lausanne.

good Solution found quicKlyAt the end of 2016, we at Kessler were approached by Mercer (Switzerland) Inc. in Zurich, a subsidiary of Marsh & McLennan Companies. We were all asking ourselves how we could expand the business in a shrinking market and migrate client data from the old IT systems to the new platform. As we were already working with the same systems, a solution soon became apparent. Once Stéphane Etter, respon- sible for Kessler Benefits Inc., Martin E. Kessler and I had completed due diligence, we agreed with Mercer in March 2017 that we would take over their 40 administration and data-processing mandates for pension funds as of April 1, 2017, and that the 17 em-ployees in Zurich and Lausanne would be integrated to form one strong team of 26.

The transfer of the new colleagues, complex IT mat-ters and persuading clients to move to Kessler Bene-fits Inc. were all major challenges that accompanied us over the course of the year. Today, I can proudly say that the new staff have been effectively integrat-ed and that we have 25 happy clients in German-speaking Switzerland plus another 35 in the French part. In this way, Kessler and Mercer have generated new synergy effects and development opportunities for all stakeholders.

What is the most underestimated risk? And who is familiar with it? After over 300 discussions with clients, our cyber team knows exactly what it is all about.

At this year’s World Economic Forum (WEF) in Davos, the new Global Centre for Cybersecurity was introduced. It will be based in Geneva. Up to 40 full-time roles will be dedicating themselves to the matter of cybersecurity and establishing stronger connections between companies and the authorities. In 2016, the losses suffered by the global economy amounted to USD 450 billion. I am certain that this is just the beginning.

From talking to clients, I have noticed that a growing number of companies are now addressing cyber risk at board and executive management level. However, there is a failure to be systematic in the approach to “risk identification, evaluation, prevention, reduc-tion and insurance”. Great improvements have already been made, which I am pleased to see as pre-vention is the best risk management approach. However, it is dangerous when the next steps are then not taken. Many companies do not systemati- cally quantify cyber residual risks. This is not about analyzing just your company. In this globally connected economy, the entire value chain must be examined.

SticK to what you KnowProperty risks such as fire and business interrup-tions still attract greater attention than cyber risks. For most companies, it goes without saying that they will insure against business interruption due to fire, but it is not the norm to take out insurance cover in the event of a cyberattack. With some exceptions, I cannot understand the logic behind this kind of risk and insurance strategy. Following my discussions with clients, I see cyber risks as the most underesti-mated risk faced by many companies. I believe that awareness will grow when they experience such losses first hand. Experts are in no doubt that the question is not if one will face a cyber loss event, but when.

cYbeR Risksthe mOst undeRestimated Risk

helmut Studermember of the executive committee


Every year, Marsh & McLennan Companies produce the Global Risks Report in conjunction with the World Economic Forum (WEF). The report explores and describes major risks and how they change over time. The Global Risks Report is published at the start of the year and is an essential element for the WEF events and discussions in Davos. For the last few years, we have held WEF follow-up events for cli-ents in Zurich and Geneva, where WEF delegates and risk specialists give feedback on the meeting and the report. The popularity of the client event increases every year – the next event will take place in January 2019.

opportunitieS and riSKSWe are living in a period of rapid change. The econ-omy is doing well, with GDP in the top ten countries rising by 1.4 percentage points to 6.8% in 2017. The economic prospects for 2018 are also good, with growth predicted to reach 3.9%.

We need to make the most of these opportunities, but it is equally important to accurately assess the potential risk. There is no question that the world has become more hazardous in the past two years. Long-standing risks such as natural disasters and overindebtedness have become more pronounced, but companies are also having to deal with new forms of risk.

fragile global SecurityAccording to the Global Risks Report, business managers consider the failings of governance at the national level around the world as the third most significant risk for business in their own countries. The vast majority of managers expect political and economic tensions between major world powers to intensify in 2018. Cybersecurity risk is also set to in-crease. At 8.4 billion, Internet of Things (IoT) devices outnumber the people on Earth for the first time ever, making us more vulnerable to systemic risks.

The full Global Risks Report is available on our website: www.kessler.ch.

glObal RisksOutlOOk 2018

roger Konradmember of the executive committee

Companies want us to provide practical risk management solutions and affordable, effective insurance coverage. Safety and security are paramount, of both employees and the products. The protection of investments is equally important, meaning the assets, technologies and data.

At Kessler, the Special Risks division is dedicated to pure financial loss, i.e. that which is not the result of personal injury or property damage. The former has increased significantly because the world has become more complex and strongly regulated. As a result, there has been a rise in costs relating to errors.

Our advisors, brokers and claims specialists in Spe-cial Risks were once again tasked with helping their

clients continue to operate safely and securely in 2017. Boards and CEOs essentially know the risks and understand that all risks are calculable – and that which can be measured can be managed. As we see the situation, the economy must prepare for great changes. The world and how we work together and communicate is changing. New technologies offer new possibilities, some of which are as exciting as they are dangerous.

two Key client concernSAn omnipresent issue with our clients in 2017 con-tinued to be insuring against cyber risk. More and more Swiss companies are ensuring that sound fun-ding is dedicated to the risks of digitalization as well as its opportunities. There has also been an increase in demand for warranty and indemnity insurance in company takeovers and for guarantees, as insurers are now in a position to compete with banks. There has once again been an increase in claims reports in the area of directors’ and officers’ liability, but we do not expect the revised draft of the stock corporation law to generate any major new risks for the Board of Directors and Executive Committee.

special RiskscYbeR Risks and cOmpanY takeOveRs

paScal Schweingrubermember of the executive committee


Does Kessler work with SMEs? Yes, in fact most of Kessler’s clients are SMEs. In Switzerland, 99% of all businesses are SMEs, and they employ two- thirds of the workforce. SMEs are the embodiment of entrepreneurial spirit and drive innovation, but are currently having to cope with increasing complexity in all areas. Political decision-makers have recognized the implications of this shift, but are struggling to provide real solutions.

Kessler is affected twice over: as a company and employer, but also as an advisor and broker for in-surance and pensions. The sector is highly regulated and certain processes are inefficient. A few years ago, we responded by launching our blue line range. The blue line insurance solutions offer extensive

cover at affordable prices, while the administra-tion has been streamlined to simplify the advisory, agreement and claims processes. A call for tenders is issued for each market segment, resulting in a product provided by one or more insurance companies. So far, the range has exceeded our expectations. The blue line solutions have proven very popular with SMEs and large corporate clients alike who are looking for simple, effective solutions. We have revamped the first-generation products in 2018 in order to offer even better terms.

We are now seeking to take the next step by expan-ding our team of advisors for SMEs with up to 100 employees. Our aim is to provide a one-stop shop for advice and management. Dedicated SME ad-visors will make use of the blue line products and processes, but also provide access to the extensive expertise within Kessler, particularly in the event of a claim.

At the same time, we are closely monitoring the evo-lution of digitalization in the insurance sector. We believe that we can revolutionize processes by mak-ing creative use of technology, thereby improving turnaround times and making life simpler for clients and insurers.

westeRn switzeRlandkessleR suppORts smes

bernard perritazmember of the executive committee

A forward-looking, coherent and holistic approach to risks is essential for every company – a require-ment that is often overlooked in everyday business. Ultimately, however, it is the responsibility of any management to understand the risks and take the necessary preventive and responsive measures to ensure that losses are not incurred in the first place or, if they are, can be overcome with minimum im-pact. The Risk Consulting team at Kessler advises clients on these matters, because the rule of thumb is the longer the timeframe, the more important it is to anticipate the risks and take appropriate action. There is great market potential for Kessler in risk management consultancy, and 2017 was correspon-dingly intense for the company.

We implemented numerous risk management proj-ects, with two topic areas proving to be in particular demand among our clients.

Despite the relatively soft insurance markets, ana-lyses on the optimization of risk financing were popular. These ensure that the purchased insurance limit is reasonable and corresponds to the actual risk exposure. In addition, the use of business analytics generates a detailed overview of risk costs, which often allows considerable cost-savings to be made.

riSK management muSt be lived Despite all the insurance options and good economic outlook, companies are advised to be vigilant and carry out ongoing risk monitoring. What is crucial is that risk management is not simply seen as a tech-nical parameter. Instead, it must be an integral part of corporate culture for which employees feel res-ponsible in their everyday work life. This calls for a management culture that puts the spotlight on risk awareness as well as a code of conduct to provide a guideline. That is an urgent priority for internal communications and general risk dialog – our Risk Consulting team also advises companies on this matter.

Risk cOnsultinga valuable investment fOR cOmpanies

Simon Künzlerdirector risk consulting inc.


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Riski & nsu Rance insight 2018...The Swiss National Bank kept its interest rate on sight deposits at –0.75%. Switzerland was once again ranked as the world’s most competitive economy