Swiss natural hazard insurance: cantonal building insurers

On 28 May 2025 a rockslide came down on the village of Blatten in canton Valais. A year later, the insurance trade paper thebrokernews.ch reported that about CHF 255m of insured damage had been recorded, CHF 240m of it in the private Elementarschadenpool, and that more than 80% of the sums for total losses had been paid within four months.

Blatten is in one of the seven cantons where buildings are insured by private companies rather than a cantonal monopoly. The event therefore tested the private half of a system that most Swiss people never think about, because it simply works. It also reopened an old argument about who should carry the risk in the mountain cantons.

Two systems inside one country

Swiss natural hazard insurance is split by canton and by what is being insured.

Buildings in 19 cantons are insured by a kantonale Gebäudeversicherung (KGV), a public cantonal building insurer with a legal monopoly. According to their association, the VKG, these insurers cover 2.3 million buildings with a total insured value of about CHF 3,100bn, roughly 85% of all buildings in Switzerland. Each KGV covers fire and natural hazards together and sets its own tariff under cantonal law.

Buildings in the other seven cantons, known by the acronym GUSTAVO (Geneva, Uri, Schwyz, Ticino, Appenzell Innerrhoden, Valais and Obwalden), and in Liechtenstein, are insured by private companies.

Contents are insured privately everywhere, except in Vaud and Nidwalden, where the KGV covers them as well.

The result is that a family in Bern has its house insured by the cantonal building insurer and its furniture by a private company, while a family in Sion has both with private insurers. Both are insured against natural hazards by law, without having chosen to be.

The private side: compulsory bundling and one tariff

For private insurers the rules come from federal law. Article 33 of the Insurance Supervision Act (VAG) requires every company that sells fire insurance to include natural hazard cover, and the details are set out from article 171 of the Supervision Ordinance (AVO). The Swiss Insurance Association (SVV) explains the system in its October 2024 brochure, titled with some pride “Weltweit einzigartig”, unique in the world.

The nine covered perils are:

1. high water;
2. flooding;
3. storm;
4. hail;
5. avalanche;
6. snow pressure;
7. rockfall;
8. falling stones;
9. landslide.

Earthquake is not on the list.

FINMA, the financial market supervisor, sets one binding premium tariff for all private insurers, so a chalet under an avalanche slope in Valais pays the same natural hazard rate as a flat in Geneva. Payouts are capped at CHF 2bn per event, CHF 1bn for buildings and CHF 1bn for contents, and at CHF 25m per policyholder.

The history is older than the law. Fire insurers first included natural hazard damage in 1953, and the cover has been bundled with every private fire policy since the late 1950s, according to the SVV. The Elementarschadenpool itself was founded in 1936.

How the Elementarschadenpool shares losses

The pool is the private insurers’ way of making a uniform tariff survivable. Each member keeps 20% of its own natural hazard claims and passes 80% to the pool, where they are shared among all members. The pool buys annual reinsurance covering losses between CHF 550m and CHF 1.8bn. Above that, the members pay jointly. There is no federal backstop. Measured against the record, the reinsurance band is well placed: a repeat of the August 2005 floods, at about CHF 1bn for private insurers, would sit inside it, while even a year like 2024, at about CHF 300m, stays below the point where reinsurers pay at all.

In numbers: an insurer that faces CHF 10m of natural hazard claims after a storm keeps CHF 2m on its own account and passes CHF 8m to the pool. The pool shares that CHF 8m among all its members, so the insurer’s final bill depends far more on the national loss than on where its own customers happen to live.

The design means that an insurer with a large book in Valais or Ticino does not carry those cantons’ mountain risk alone. That is exactly the point of contention after Blatten. In January 2026 the Bote der Urschweiz, a regional newspaper, published criticism that large insurers were undermining the solidarity of the pool, and thebrokernews.ch noted that the GUSTAVO cantons, Ticino and Valais in particular, had borne disproportionate losses in 2023–2025. Under a uniform tariff, the policyholders of the lowlands help pay for the mountains, and not every insurer is equally happy about that.

One hailstorm, two cantons

A hypothetical summer hailstorm shows how the pieces fit. It crosses two family homes, one in Bern and one in Sion, and damages the roof, the windows, the garden furniture and the car parked outside each.

In Bern, the roof and windows are a claim on the cantonal building insurer, paid at the cantonal tariff from the KGV’s own resources. The garden furniture is contents, so it goes to the family’s private household insurer, which keeps 20% of the claim and passes 80% to the Elementarschadenpool. The car is a matter for the motor policy, if it includes hail cover, and stays outside the natural hazard system entirely.

In Sion, there is no cantonal insurer. The roof, windows and garden furniture all go to the family’s private insurer, at the FINMA tariff, and all of them are shared through the pool. The car again sits under the motor policy.

Neither family has to wait for an official declaration. Cover applies when one of the nine perils causes the damage, and the insurer or the KGV pays. That is a sharp contrast with France, where a commune must be recognised by decree before the CatNat guarantee opens, as the CatNat page describes. It also explains why the hail of 28 August 2026 shows up in so many places at once: mostly in motor books, about a tenth in the pool, and in the cantonal insurers’ own accounts for buildings in the KGV cantons.

Recent losses

The figures below come from different bodies and do not add up to a national total. The private pool and the cantonal insurers report separately.

Two points stand out. Early estimates move: SRF reported a first estimate of CHF 320m of private insured damage for Blatten in June 2025, well above the later figure. And hail is becoming the system’s most expensive routine peril. The SVV said in June 2025 that hail now accounts for about a quarter of annual natural hazard claims and is rising. The August 2026 storm was mostly a motor event, and only about 10% of its private losses fell under the pool, with the cantonal insurers counting their building losses separately.

For Blatten specifically, the pool’s share broke down as CHF 210m for buildings and CHF 30m for contents.

The earthquake gap

Everything above applies to nine perils. For the tenth, earthquake, Switzerland has no compulsory cover at all.

According to the SVV, cited by finews.ch on 30 September 2026, only 21% of building values in the country are insured against earthquake, and a major quake could cause CHF 30–40bn of damage. That is thirty to forty times the largest natural hazard event the private system has ever paid for.

The federal answer under discussion was a contingent liability, an Eventualverpflichtung, which would have put the Confederation behind earthquake losses. The Council of States rejected the proposal in December 2025. On 30 September 2026 the National Council rejected it as well, which finews.ch described as the final failure of the plan. The SVV’s head, Urs Arbter, had called the proposal a sham solution and argued for expanding private cover instead.

As of the end of September 2026, then, the earthquake question is back where it started. Four building values in five are uninsured against earthquake, and the state has declined to stand behind them in advance.

How Switzerland compares

The European Environment Agency’s indicator on losses from weather and climate extremes, updated on 14 October 2025, lists Switzerland among the countries where more than 35% of losses between 1980 and 2024 were privately insured, alongside Belgium, Denmark, France, Luxembourg, the Netherlands, Liechtenstein and Norway. Switzerland does not appear in EIOPA’s protection gap dashboard, which covers only EU and EEA countries; the protection gap page explains the difference between the two datasets.

The private Swiss model is close to Norway’s: bundled with fire cover, priced at one rate, losses shared through a pool. The Norway page sets out the differences, chiefly Norway’s separate state scheme for uninsurable land and roads. The cantonal monopolies have no real equivalent among the other schemes, although Spain’s Consorcio is also a public body that pays claims itself, as the Consorcio page describes.

Switzerland also matters as a reference abroad. Austria’s Court of Audit, recommending in October 2025 that Austria move to an insurance model for extreme weather damage, cited Switzerland and France as examples, as the Germany and Austria page explains. The comparison of European schemes sets the Swiss system against the other five.

The criticisms

The earthquake gap. With 21% of building values insured and a potential loss of CHF 30–40bn, Switzerland’s single largest natural catastrophe risk sits mostly outside insurance.

A uniform tariff under strain. One FINMA tariff for the whole private market means the mountain cantons are subsidised by the rest. Losses in Ticino and Valais in 2023–2025 have made that subsidy visible.

Pool solidarity. The post-Blatten debate turned on whether large insurers are committed to the pool or would prefer to price their own risk.

Hail. A quarter of annual claims and rising, with the 2026 storm reported as a record for the Mittelland, hail is putting steady pressure on premiums.

Blatten showed that the pool can pay quickly in a mountain canton. Whether a single tariff for mountain and lowland can survive a run of years like 2023–2025 is the question the next bad season will put to it.