Mutual structure, actuarial principles and surplus participation

A company owned by its policyholders

The Rentenanstalt was conceived from the start as an institution that belonged to its insured members. Widmer formulated the principle in a sentence that the Zurich association for economic history studies still quotes in its portrait of him: the insured together constitute the institution and represent the legal person to which the assets belong.¹ The phrase expresses the mutual idea in its purest form. There were no shareholders who expected a dividend on their capital, and the only claimants on the company's assets were the policyholders themselves. Any surplus that the business produced therefore belonged to them.

The legal form of this idea changed over time. In its first decades the Rentenanstalt was an institution sui generis, created under cantonal private law with the guarantee of the Kreditanstalt. When the federal Code of Obligations of 1881 introduced a uniform Swiss law of companies and cooperatives, the Rentenanstalt registered as a mutual insurance cooperative (Genossenschaft).² The cooperative, which the Code designed for associations of persons pursuing a common economic purpose through joint self-help, suited a mutual insurer well. Each policyholder with a participating policy became a member, and the general meeting or the delegates of the members formed the supreme body of the company. The legal form lasted, in its essentials, until 1997.

The relationship with the Kreditanstalt loosened as the company's own reserves grew. Swiss Life's historical account records that the articles of association were revised in 1879 with regard to the terms on which the Kreditanstalt could withdraw, and that in 1885, when its assets had reached 20 million francs, the Rentenanstalt became a mutual insurance company in its own right. The HLS confirms that the separation from the Kreditanstalt was complete by 1885.³ After less than thirty years, the institution that had begun without capital no longer needed the guarantee of the bank. Its policyholders' reserves now provided the security that the bank's capital had once supplied.

The date of 1885 has a further significance. In the same year the Confederation enacted its first Insurance Supervision Act, after failures and incompetent management had damaged confidence in the industry.⁴ The emancipation of the Rentenanstalt from its founding bank and the beginning of federal supervision coincided. From then on, the security of the policyholders rested on three elements: the company's own reserves, the mutual structure that returned surpluses to the members and the oversight of a federal authority. The history of that authority, from the Federal Insurance Office to FINMA, is the subject of Chapter E.IV.

Cautious premiums and the return of surplus

The mutual structure and the technique of surplus participation belonged together. A life insurer that promises to pay a fixed sum decades in the future cannot know in advance how long its policyholders will live, what interest rates its investments will earn or what its administration will cost. It therefore calculates its premiums on cautious assumptions, deliberately assuming somewhat higher mortality among those insured for death benefits, lower interest and higher costs than it expects. The difference between these prudent assumptions and the actual results is the surplus. In a proprietary company owned by shareholders, part of this surplus may be distributed as profit. In a mutual company it belongs, in principle, entirely to the members and is returned to them in the form of bonuses, reduced premiums or increased benefits.

This mechanism explains the long-term stability of the early mutual insurers. Because premiums contained a safety margin, a company could absorb years of poor investment returns or unexpectedly high mortality without endangering its promises. Because surpluses were returned, policyholders did not pay more than the true cost of their insurance over the life of the contract. The system rested on the fairness and competence of the management, which decided how much of the surplus to distribute and how much to retain in reserves for future adverse years. That decision was the most sensitive point of the mutual model, and it remains the most sensitive point of the modern participating life insurance contract.

The same logic survives in present-day Swiss law in two places. In individual life insurance, the revised Insurance Contract Act obliges the insurer to inform the policyholder, before the contract is concluded, about the methods and principles for calculating and distributing surpluses and about surrender and conversion values.⁵ In the occupational pension business, the minimum distribution ratio discussed below prescribes the share of the returns that life insurers must pass on to the insured. The mutual principle that Widmer expressed in 1857 thus continues to shape the law governing a company that has long since become a listed corporation.

Mathematics as a public good

The early Swiss life insurers also contributed to the organisation of actuarial science in the country. Their need for mathematicians, statistical data and reliable tables coincided with the growth of the mathematical tradition at the Polytechnikum and the universities. The Swiss actuarial association was founded in 1905 and began publishing its Mitteilungen in the following year. The volumes, now digitised by e-periodica, cover the period from 1906 onwards and document the technical debates of the profession.⁶ The directors and actuaries of the Rentenanstalt were naturally among the central figures of this community, since the company was for decades the largest life insurer in the country and held the largest body of Swiss mortality experience.

The personal union of company management and professional leadership extended to the political representation of the industry. When the private insurers created a national association in December 1900 as a section of the Swiss Trade and Industry Association, their motive was to anticipate the planned compulsory state accident insurance. Gottfried Georg Schaertlin, director of the Rentenanstalt and a leading figure among the Swiss life insurers, served as the first director of the association from 1901 to 1937.⁷ For more than a generation, the voice of the Swiss insurance industry in Bern was the voice of a man from the Rentenanstalt. The Swiss Insurance Association (SVV), which today represents some seventy member companies from its seat in Zurich, grew from this beginning.

Notes

1. Verein für wirtschaftshistorische Studien, “Johann Conrad Widmer”, pioniere.ch, https://pioniere.ch/pioniere/johann-conrad-widmer/, which quotes Widmer's statement that the insured collectively form the institution and represent the legal entity to which the assets belong. ↩
2. HLS, Degen, “Rentenanstalt” (cited above), which records the registration as a mutual insurance cooperative after the introduction of the Code of Obligations and the complete separation from the Kreditanstalt in 1885. ↩
3. Swiss Life Group, “When premiums were still paid with stamps”, https://www.swisslife.com/en/home/blog/geschichte-swiss-life.html, which states that the articles were revised in 1879 so that the Kreditanstalt would withdraw from the guarantee once the Rentenanstalt had assets of 20 million francs, and that this happened in 1885, when the Rentenanstalt became a mutual insurance company. HLS, Bernard Degen, “Rentenanstalt”, version of 2010, edited 23.12.2011, https://hls-dhs-dss.ch/de/articles/041816/2011-12-23/, states that the company separated completely from the Kreditanstalt in 1885. ↩
4. HLS, Körner and Degen, “Versicherungen” (cited above), which states that the Confederation enacted the first insurance supervision act in 1885 after failures and cases of incompetent management. ↩
5. Federal Act on Insurance Contracts (VVG) of 2 April 1908, SR 221.229.1, as at 1 January 2024, Art. 3 para. 1 lit. e and f, https://www.fedlex.admin.ch/filestore/fedlex.data.admin.ch/eli/cc/24/719_735_717/20240101/de/pdf-a/fedlex-data-admin-ch-eli-cc-24-719_735_717-20240101-de-pdf-a.pdf. Art. 3 para. 1 lists the information to be given, including the principles of surplus calculation and distribution (lit. e) and surrender and conversion values with the associated costs (lit. f). ↩
6. e-periodica, Mitteilungen / Vereinigung Schweizerischer Versicherungsmathematiker = Bulletin / Association des Actuaires Suisses (1906–1988), https://www.e-periodica.ch/digbib/volumes?UID=msa-001. The listing shows the association's bulletin from 1906 under its original name. ↩
7. HLS, Matthieu Leimgruber, “Schweizerischer Versicherungsverband (SVV)”, version of 23.09.2025, https://hls-dhs-dss.ch/de/articles/062282/2025-09-23/. The article describes the foundation in December 1900 as a section of the Swiss Trade and Industry Association, names Schaertlin as first director from 1901 to 1937 and lists the Rentenanstalt among the 21 founding companies. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.