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Financial Report


SERV closed its 15th financial year with a positive net income (NI) of CHF 88.1 million, despite the COVID-19 pandemic.

The essential accounting requirements for SERV are formulated in the SERV Act (SERVG) and in the SERV Ordinance (SERV-V). SERV must keep its own accounts, be economically viable as an insurance company and manage risks for public and private debtors separately. To meet these requirements, SERV prepares financial statements on the closing date (cf. PDF Financial Statements, p. 45), consisting of the income statement, balance sheet, cash flow statement, proof of economic viability, segment accounting and notes.

Individual items of the income statement, the balance sheet and segment accounting are explained in more detail in the Notes. Items shown net in the financial statements are broken down in the Notes, which renders the calculation of net results transparent. This is significant particularly in the case of claims from losses, claims from restructuring, credit balances from debt rescheduling agreements and loss provisions, as these are valued in accordance with the accounting principles (AP) and reported on a net basis.

Income Statement

Despite the COVID-19 pandemic, SERV closed its 15th financial year with a positive net income (NI) of CHF 88.1 million (previous year: CHF –81.5 million) and posted an operating profit of the same amount.

Premium income rose year-on-year from CHF 71.6 million to CHF 83.5 million. In comparison to previous years, this was a slightly above-average financial year in terms of premiums. The average income from premiums amounted to CHF 77.6 million. At CHF 79.4 million, SERV achieved the third-highest result in its history in terms of earned premiums.

Interest income from debt rescheduling agreements amounting to CHF 10.9 million was largely attributable to a payment from Argentina of CHF 9.5 million. As in 2020, Cuba, Pakistan and Cameroon were unable to meet their payment obligations in 2021, due in part to the COVID-19 pandemic. Argentina made only one interest payment. The countries that did meet their payment obligations were those with lower interest-bearing debts, as a result of which they accounted for only CHF 1.4 million of the interest income from debt rescheduling.

SERV’s 2020 income statement was dominated by loss expenses of CHF 167.9 million. While the formation of loss provisions led to a negative net income in the 2020 financial year, it resulted in a settlement of indemnity payments of CHF 109.5 million in 2021 with little impact on profit and loss, with SERV reporting negative loss expenses (income) of CHF 5.9 million for the first time in its history. SERV was able to release the provisions formed in the previous year for incurred but not reported (IBNR) and reported losses because of changes in the claim status of the claims concerned. It put in place value adjustments and released provisions for those cases where disbursements were made and also released provisions for cases that no longer met the criteria for provisions.

Net income

in CHF million


Premium income

in CHF million


The debt rescheduling income of CHF 11.7 million resulted from the release of obsolete value adjustments for the agreements with Egypt, Bangladesh, Indonesia and Iraq.

The increase in personnel expenses from CHF 13.0 million in the previous year to CHF 15.0 million is attributable to the expansion of the workforce for the Transformation SERV (TRS) project. Non-personnel expenses amounting to CHF 9.3 million included CHF 4.0 million for the TRS project and a partial write-off of CHF 1.8 million for the costs capitalised in 2020 for the TRS project. This partial write-off was made as a consequence of the realignment of this IT project (cf. Corporate Governance, IT). As a further consequence, it was decided not to capitalise CHF 0.8 million in 2021.

Financial income mainly comprises foreign currency differences and was positive in 2021 at CHF 0.5 million. As in the previous year, the result was only marginally affected by negative interest rates on bank account balances. The fact that SERV is only permitted to invest with the Federal Treasury means that it has generated no return on its capital since 2017, which currently stands at CHF 2.951 billion. The loss of interest income from cash investments is a significant factor, having amounted to CHF 29.0 million in 2007, the year in which SERV was founded, and an average of CHF 18.3 million until 2016. This interest income fully financed SERV’s operating expenses in its first few financial years.

Balance Sheet

On the assets side, cash in hand & at bank increased by CHF 53.1 million compared to 2020 due to large premium payments made at the end of December. In principle, SERV aims to keep the balance on the current account low in order to minimise the amount of negative interest payable.

The high indemnity payments and the absence of major repayments from debt rescheduling agreements (in particular from Argentina and Pakistan) resulted in a decrease in cash investments of CHF 19.0 million in the year under review. Credit balances from debt rescheduling agreements were down by only CHF 10.2 million in the year under review (previous year: CHF 18.2). The liabilities side was dominated by the release of loss provisions totalling CHF 91.0 million.

As of 31 December 2021, capital totalled CHF 2.832 billion, CHF 88.1 million higher than the previous year. It should be noted that since 31 March 2021, the capital calculation is affected by the applicable rules for the calculation of the exposure with regard to the consideration of investment-grade reinsurance and the management of exchange rate risks (surcharge for foreign currencies in the core capital [CCap]). If the capital as of 31 December 2020 had been calculated on the basis of the method employed since 31 March 2021, the figures reported as of 31 December 2020 would have been as follows: risk-bearing capital (RBC) of CHF 1.038 billion (up by CHF 39.5 million) and CCap of CHF 1.637 billion (up by CHF 129.0 million).

The inclusion of investment-grade reinsurance in the exposure calculation and a surcharge for exchange rate risks in the core capital (CCap) impacts on the capital calculation.

The total of RBC plus CCap, CHF 1.625 billion, rose by CHF 106.6 million (7%) year on year. The compensation reserve (CR) decreased by CHF 188.1 million to CHF 1.119 billion (16%). The CR allows SERV to manage the major volatility it is exposed to through country and debtor downgrades and elevated losses as a result of political and economic crises. This reserve also allows SERV to continue covering risks for export transactions.

All in all, SERV has a solid capital base for fulfilling its legal mission of promoting the Swiss export industry by providing effective insurance solutions, even in periods with an uncertain economic outlook. At the same time, SERV is able to soften the impact of any deterioration in risk ratings for countries and enterprises and has the buffer necessary to deal with any type of crisis.

Cash Flow Statement

SERV’s 2021 cash flow statement (cf. PDF Cash Flow Statement, p. 47) posted a net increase of CHF 34.1 million (2020: CHF 13.5 million). In previous years, SERV generated an average cash flow of CHF 124.3 per year. SERV continues to have excellent liquidity with CHF 3.036 billion consisting of cash in hand & at bank and time deposits.

At CHF 5.0 million, cash flow from operating activities was up CHF 18.3 million year on year. Compared to the previous year, CHF 26.7 million more was paid out in claims and CHF 0.3 million more for personnel and operating costs in the 2021 financial year. At the same time, premium payments increased by CHF 40.8 million to CHF 116.7 million and repayments from claims by CHF 4.5 million to CHF 16.4 million.

Cash flow from investment activities includes both regular and unscheduled early repayments from credit balances from debt rescheduling agreements plus the corresponding interest. At CHF 29.1 million, this figure remained at a similarly low level as in the previous year. This was due to missed payments resulting from pandemic-related deferral requests (Cameroon and Pakistan) and requests to renegotiate existing debt rescheduling agreements (Argentina and Cuba). Cash flow for this area averaged CHF 108.9 million in the past. It was striking to note that interest payments from debt rescheduling agreements have halved compared to 2007, the year in which SERV was founded. Since 2020, the project costs for the TRS project have been capitalised under intangible assets, with CHF 3.9 million capitalised for 2021. The cash flow relating to this capitalisation amounted to CHF 3.8 million.

Proof of Economic Viability

In 20201 SERV showed positive loading in all segments. This means that earned premiums exceeded the actuarial risk, i.e. the average expected annual loss, which is the theoretical probability-weighted average potential loss calculated for an annual reporting period. The calculation is based on the loss probabilities and assumed recovery ratios.

For 2021, all segments with the exception of the “private debtors without del credere” segment had surplus cover on an operational level (economic viability 1). As a result of the general interest rate situation, there has been no interest income at all from cash investments since 2017, for which reason the figures for economic viability 1 and 2 are identical. No substantial contributions from cash investments are expected for the foreseeable future. Despite the deficient cover in the “private debtors without del credere” segment for economic viability 1 and 2, SERV overall was able to post significant surplus cover of CHF 17.8 million across all grades.

Since SERV was founded, the average surplus cover of economic viability 1 for the primary segment “public debtors” has been CHF 6.2 million, and CHF 9.2 million for the primary segment “private debtors”. This means that economic viability 1 has so far been significantly exceeded for the primary segments. If economic viability on an operational level (economic viability 1) is positive, so is economic viability 2, unless SERV’s capital is burdened with negative interest rates.

Segment Accounting

In the income statement by segment, items that are not directly related to an insurance transaction in a segment are distributed across the three segments using an allocation formula (cf. PDF Notes regarding the Income Statement, Comments 12–18, p. 55–56). Items are not broken down into segments on the balance sheet where doing so has only limited indicative value.

In the income statement, the two segments “private debtors with del credere” and “public debtors” closed the year with a negative result. This was largely down to the loss expenses resulting from the formation of provisions and value adjustments. The successful performance of the “private debtors without del credere” division was not able to compensate for the losses of the other two segments. Experience shows that the annual results for segment accounting are influenced to a large extent by the loss expenses incurred and are thus very volatile.

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