War, inflation and the interwar period

The First World War and the influenza

The First World War did not touch Swiss territory, but it affected the Rentenanstalt through its policyholders and its foreign business. Life insurers that covered men of military age in belligerent countries faced war mortality that no mortality table had anticipated, and those with large German portfolios faced the disruption of communications, capital controls and the steady depreciation of the mark. At home, the end of the war brought a mortality shock of a different kind. Swiss Life records that almost seven hundred persons insured with the Rentenanstalt died in the influenza epidemic of 1918 and 1919.¹ The claims were heavy, but they were borne by a company whose premiums had been calculated with prudence and whose reserves had been built over sixty years.

The currency losses were more serious. The German business of the Rentenanstalt had been written largely in marks, and the reserves backing these policies had been invested to a considerable extent in German securities and mortgages. When the German inflation turned into hyperinflation in 1922 and 1923, the value of mark-denominated life insurance collapsed. Swiss Life's historical account states that the devaluation of the mark rendered 15,000 German policies worthless. A German study of Swiss investments written in 1980 recalled the experience of German savers in a single sentence: life insurance policies in marks that fell due during the great inflation of 1923, or shortly after the currency reform of 1948, were practically worth nothing.²

Expansion in the 1920s and the Swiss-franc policy

The German catastrophe proved, paradoxically, to be the starting point for a new phase of growth. The HLS observes that the 1920s offered the Rentenanstalt opportunities for expansion abroad, partly because the German competitors had declined in the hyperinflation. The company continued its operations in Germany even after the National Socialist seizure of power in 1933. The reason for the Swiss insurers' success in these years lay in their currency. German savers who had seen their mark policies destroyed wanted life insurance in a currency that would keep its value. The Swiss insurers could offer policies denominated in Swiss francs, backed by reserves invested in Switzerland and subject to Swiss supervision.

The Independent Commission of Experts Switzerland – Second World War (the Bergier Commission) examined this business in its study of Swiss insurance companies. Its summary states that Swiss insurers established a leading position in foreign-currency insurance, mainly in Swiss francs and US dollars, in the 1920s. These policies protected their holders against currency instability and, for wealthy clients, sometimes served as a means of transferring capital to Switzerland. By the late 1930s, foreign business generated roughly sixty per cent of the premium income of the Swiss insurers, and Germany was the most important foreign market.³

The Swiss-franc life policy of the interwar period is an early instance of a function that the Swiss financial centre has performed ever since: the provision of a stable currency, a reliable legal order and discreet management to clients from countries with weaker institutions. The same function explains much of the later growth of private banking in Zurich and Geneva, which Part G of this book examines. For the life insurers it created a large, profitable and politically exposed foreign business. It also created the link, which the Bergier Commission noted, between foreign-currency insurance and capital flight, a link that anticipates the later debates about the use of insurance wrappers in cross-border wealth planning discussed in Chapter E.V.

The National Socialist period

The German business of the Swiss insurers continued throughout the years of National Socialist rule. The Bergier Commission found that the Swiss companies operated profitably in Germany between 1933 and 1945 despite ideological pressure, and that many were able during the war to strengthen their technical reserves beyond what was necessary and to form additional hidden reserves. The most painful part of its findings concerns the Jewish policyholders. According to the summary, a majority of them surrendered their policies before the war in order to pay the special taxes imposed on them and to finance their emigration. The regime then confiscated the remaining policies under the Eleventh Decree to the Reich Citizenship Law of November 1941. The Swiss companies responded in different ways: some resisted transfers through protest, refusal and delay, while others readily provided names and paid out values without resistance.⁴

The HLS article on the Rentenanstalt records only that its German operations continued after 1933. A Swiss financial centre that today emphasises its adherence to international standards has had to confront this part of its history, and the insurers were included in the examination that the Federal Council commissioned from the Bergier Commission in the late 1990s. For the practitioner, the episode is a reminder that the long-term character of the life insurance contract creates long-term responsibilities. Policies written in the 1920s and 1930s gave rise to claims and questions that were still being examined more than half a century later.

Growth at home and the new head office

In Switzerland the interwar years brought steady expansion and the modernisation of the business. The Rentenanstalt replaced handwritten policies in 1920 and introduced punch-card processing in 1926. By 1932 its portfolio comprised 164,458 policies. The most important new line of business, however, was collective insurance. After 1918 employers increasingly delegated the management of their pension arrangements to life insurers. The history of Swiss social security describes this group insurance as a central element of the strategy of complementarity between private and public provision that dominated Swiss social policy from 1918 until the introduction of the federal old-age and survivors' insurance (AHV) in 1948. The anniversary magazine of Swiss Life records that the oldest company contracts still in force in 2007 dated from 1918 and had been concluded with the PKZ group and the Mägerle machine factory.

The life insurers used this position to influence the design of the Swiss pension system. The history of social security notes that pension funds controlled by employers or managed by life insurers developed in decentralised structures after 1918, benefiting from tax relief. When a first federal old-age insurance bill, the Lex Schulthess, came before the voters in 1931, the life insurers rejected it because, for them, only a state pension that preserved the independence and further development of private provision was acceptable.⁵ The line of argument, that the state should provide a basic pension and leave the rest to employers and private insurers, became the doctrine of the three pillars, which the Swiss people adopted in 1972.

In 1940 the Rentenanstalt moved into its new head office on the former Alpenquai, renamed General-Guisan-Quai after the commander-in-chief of the Swiss army in the Second World War. German Wikipedia states that the building was constructed between 1937 and 1939 to plans by the Zurich architectural firm Pfister.⁶ The move into a representative building by the lake, in the first year of the war, was a statement of confidence in the future of the company and of the city. When the Rentenanstalt celebrated its centenary in 1957, an exhibition showed seven hundred thousand file folders and more than half a million punch cards, the paper memory of a century of contracts.

Notes

1. Swiss Life Group, “When premiums were still paid with stamps” (cited above), which records nearly 700 deaths among Rentenanstalt policyholders in the influenza epidemic of 1918/19, the replacement of handwritten policies in 1920, the invalidation of 15,000 German policies by the devaluation of the mark in 1922/23, the introduction of punch cards in 1926 and the exhibition of the centenary year 1957. ↩
2. Ernst-Uwe Winteler, Kapitalanlagen in der Schweiz (Wiesbaden: Gabler, 1980), chapter “Schweizer-Franken-Versicherungen”, pp. 98–147, preview at https://link.springer.com/chapter/10.1007/978-3-663-13268-4_5. The opening of the chapter contains the observation on mark policies after 1923 and 1948. ↩
3. Unabhängige Expertenkommission Schweiz – Zweiter Weltkrieg (UEK), Stefan Karlen, Lucas Chocomeli, Kristin D'haemer, Stefan Laube and Daniel C. Schmid, Schweizerische Versicherungsgesellschaften im Machtbereich des “Dritten Reichs”, vol. 12 (Zurich: Chronos), summary at https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungen/12versicherungen.htm. The summary describes the leading position of Swiss insurers in foreign-currency policies in the 1920s, the share of foreign business of about 60 per cent of premium income in the late 1930s and the treatment of Jewish policyholders. ↩
4. UEK, vol. 12, summary (cited above), https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungen/12versicherungen.htm. The summary states that a majority of Jewish policyholders surrendered their policies by the start of the war to pay special taxes and finance emigration, that the 11th Decree to the Reich Citizenship Law of November 1941 provided for direct confiscation, and that some companies paid out only a small share through protest, refusal and delay while others disclosed names and delivered values without resistance. The summary describes these reactions for the Swiss insurers as a group and does not name the Rentenanstalt in this context. ↩
5. Geschichte der Sozialen Sicherheit in der Schweiz, “Alter”, https://www.geschichtedersozialensicherheit.ch/risikogeschichte/alter. The page describes the role of pension funds managed by life insurers after 1918, the position of the life insurers on the Lex Schulthess of 1931, their advocacy of the three-pillar doctrine and the character of the BVG of 1985 as a minimal framework law. ↩
6. Wikipedia (German), “Swiss Life” (cited above), on the construction of the head office between 1937 and 1939 and the move from the Alpenquai. Cited for orientation. ↩

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 September 2025.