The pillar insurance companies of the Zurich marketplace

In 2019, the security branch of the financial sector generated one in six francs of added value and provided one in ten jobs on the banks of the Limmat

Zurich is one of the world’s largest insurance centers in terms of value added. However, the study “Zurich Financial Center 2021-2022” also shows that the coronavirus pandemic will not leave this financial sector unscathed.

The financial center on the banks of the Limmat is important for the prosperity of the Zurich region and a pillar of the labor market. In hardly any other region of the Swiss Confederation, this sector contributes as much to overall economic output as in that city.

In 2019, the financial sector generated one in six francs of value added and provided one in ten jobs in the area.

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In addition to being a major banking center, the financial hub of Zurich is in fact also home to a major international insurance cluster. In terms of added value, this is actually one of the largest insurance centers in the world and is almost on par with London.

In the Zurich region, insurance companies contribute just as much to regional GDP as banks – evidence of a top ecosystem.

It structurally distinguishes the financial center of Zurich from similar international benchmarks such as New York, London, Hong Kong or Singapore, where the value added contribution of banks is much higher than that of insurance companies.

From UBS and Credit Suisse to Zurich and Swiss Re

In addition to big banks like UBS and Credit Suisse, the city of Zurich is home to the Zurich and Swiss Re groups, which are among the world’s largest insurance companies in their field.

They play a decisive role in making the city the undisputed heart of the regional financial center: nearly 60 percent of the added value and 65 percent of the jobs in the area’s financial sector come from the city.

But the financial sector is also a very important part of the economy in the districts of Bülach, Horgen, Uster and Winterthur. While in Zurich city banks constitute the largest sub-market of financial activity, in these hinterland territories insurance institutions do.

Half of Swiss insurance companies are based in Zurich

More than half of the 200 or so insurance companies in Switzerland are located in the Zurich region – a record that leaves no room for doubt. The availability of qualified employees, a well-developed infrastructure and stable framework conditions are decisive factors in the choice of location.

All of this is demonstrated by an online survey of industry experts conducted as part of the study. In addition to geographical concentration, there is also a high degree of market concentration within the individual insurance sectors, since a large part of the premium volume is generated by a few large insurance companies.

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The market leaders in the individual insurance sectors are mainly based in the Canton of Zurich. Among them, Swiss Re, one of the world’s largest reinsurers which, together with its national and international subsidiaries, forms one of the world’s most important reinsurance hubs, is a clear leader.

Pandemic is more the enemy of banks

Overall, the financial sector in the Zurich region has been able to grow after the financial crisis, although the development of sub-markets varies quite considerably.

Due to the structural changes in recent years and the heavy impact of the financial crisis, the value-added development of banks has decreased overall.

Insurance companies, on the other hand, have experienced stable growth in value added.

The report ‘Zurich Financial Center’ 2021-2022

As a result of the COVID19 crisis, value added in the Zurich financial center is expected to decline in 2020, due to companies’ reluctance to invest and increased claim payments by insurance institutions.

In addition, a low interest rate ecosystem that has persisted since the financial crisis is likely to continue longer due to the coronavirus pandemic and will exacerbate banks’ structural difficulties in making profits.

Insurance companies are also challenged by a difficult marketplace in terms of investment strategies and product offerings, which constantly requires them to come up with new ideas.

Nevertheless, the financial sector played a stabilizing role in the pandemic crisis and thus helped cushion the overall economic impact of the pandemic.

A study of 10 years and 70 experts

BAK Economics, a research institute with locations in Basel, Zurich and Manno, has prepared the study “Financial Center Zurich 2021-2022” with a focus on the city on the banks of the Limmat as an insurance location on behalf of the Cantonal Office of Economics and Labour.

It is based on monitoring data over the period from 2000 to 2019, i.e. over a decade, as well as a survey of 70 industry experts between June 15 and July 9, 2020.

The press conference with Cantonal Councillor Carmen Walker Späh, Head of the Department of Economic Affairs, Corine Mauch, Mayor of Zurich, Urs Arbter, Deputy Director of the Swiss Insurance Association (SIA) and Michael Grass, Member of the Executive Board of BAK Economics, was broadcast live on the Internet at www.zh.ch/live.