Administrative Expenses Vary Broadly Between Swiss Mandatory Health Insurance Providers

With premiums for mandatory health insurance going up once again in 2025, many residents of Switzerland wonder how big a role the administrative expenses play in the price increases.

In total, the costs of administrating mandatory health insurance in 2023 totaled 1.72 billion francs, as newly published data from the Swiss federal government shows. At first glance, that seems like an enormous expense. But when compared to the costs of healthcare claims, the administrative costs are relatively small. “Climbing healthcare costs are the main reason for the strong hikes in health insurance premiums that we have seen in recent decades,” says moneyland.ch analyst Felix Oeschger.

Employee salaries made up the bulk of administrative costs in 2023, totaling 1.15 billion francs. That means two-thirds of the money that providers of mandatory health insurance spend on administration is used to pay employees. Sales commissions total 59 million francs, spending on advertising totals 80 million francs, asset depreciation totaled 27 million francs, and other business expenses totaled 403 million francs.

Administrative costs per insured person

On average, mandatory health insurance providers spent 190 francs on administration per insured resident over the course of 2023 (not accounting for asset depreciation). For the sake of comparison, 10 years ago the administrative cost per insured resident was 20 percent lower at 153 francs.

The efficiency with which different compulsory health insurance providers manage their finances varies. In 2023 too, there were major differences in administrative spending. The cost of administration (excluding asset depreciation) per insured person ranged between 89 and 501 francs per insurance policy holder (see Table 1).

The Krankenkasse Luzerner Hinterland had the lowest administrative expenses per insured person, at 89 francs per customer. Klug health insurance (98 francs) and the Sumiswalder Krankenkasse (124 francs) also had low administrative costs.

Administrative costs in relation to insurance premiums

Comparing administrative expenses (minus asset depreciation) against insurance premiums (excluding risk compensation) provides another indicator of how efficient mandatory health insurance providers are. Across all insurance providers combined, administrative expenses were equal to 4.9 percent of total premiums paid by residents.

The Krankenkasse Luzerner Hinterland also takes first place in this regard (see Table 2). Its cost of administrating mandatory health insurance equaled just 3.3 percent of risk-adjusted insurance premiums. Sumiswalder Krankenkasse used 3.6 percent of money it collected in premiums (risk-adjusted) on administration, and Sodalis used 4.0 percent.  

These figures are shown on the information pages of mandatory health insurance offers in the mandatory health insurance comparison on moneyland.ch.

Sales commissions equal 0.17 percent of total insurance premiums

Health insurance providers collectively spent 59 million francs on sales commissions for mandatory health insurance in 2023. That is 3.4 percent of the total spending on administration, and 0.17 percent of the total insurance premiums paid by customers. That is lower than the amount spent on sales commissions for voluntary, supplemental health insurance.

Table 1: Administrative costs per mandatory health insurance provider in 2023

otes: Administrative costs minus asset depreciation, per insured person. Mandatory health insurance providers that will no longer operate in 2025 are not included in the comparison.

Table 2: Administrative cost in relation to insurance premiums in 2023

Notes: Administrative costs (minus asset depreciation) in relation to insurance premiums (minus risk compensation). Mandatory health insurance providers that will no longer operate in 2025 are not included in the comparison.