It is too early to say whether the pandemic will hurt the economy as badly as the financial crisis did twelve years ago. One big difference however is glaringly obvious: unlike in the financial crisis of 2008, bankers aren't the bogeymen but have assumed an important role to keep the economy going.

All eyes are on the banks after the government asked them to distribute emergency loans to companies in crisis and as the Swiss National Bank issued them with unlimited liquidity to fulfill this task. It is not surprising that the top bankers are on a roll and it is fitting that «Schweizer Illustrierte», a magazine devoted to Swiss celebrities, should devote the front page story to Credit Suisse Chief Executive Thomas Gottstein.

Pandemic, not Epidemic

It is in a stark contrast how insurers are being perceived. Their image has been dented by the discussion about why epidemic policies don't provide cover for losses incurred through a pandemic. The industry for sure is in for a tough period with difficult decisions about compensation.

That's a sudden change of fortune: the reputation of Swiss insurance firms has definitely been much better than the image of Swiss banks in recent years. Though the events of 2008 hit Swiss Re very hard, the industry as a whole is still known for pursuing a rock-solid business. With generous dividends for their shareholders, insurers became the darlings of the investor community – and savings programs such as the one designed by Zurich, were dealt with swiftly.

Eating of the Same Pie

The Swiss insurance industry has been very active in terms of technological innovation and corporate culture, putting the firms at least on a par with the banking business. The universal insurance companies are steadily expanding their digital eco-systems and have encroached on the pitch of banks for instance in respect to the property (home) business. Every third new mortgage today is being granted by an insurer or pension fund.

And while insurance CEOs for sure are paid well enough, the eyes have always been on their banker colleagues in the debate about excessive bonuses and greed. Kickbacks, excessive spending, workplace harassment – you name it, bankers have given cause for countless unsavory headlines.

Make It Happen Quickly

It seems the time of a new era may finally have begun. Among small entrepreneurs, bankers had a reputation for a certain stinginess – the SNB says that 40 percent of unused credit limits are in the small-firms business – now, after the emergence of the coronavirus, banks are called upon to distribute liberally the money that is available to sustain an ailing economy, and at no risk for the banks themselves. The government is vouching for loans of up to 500,000 francs ($520,000) to 100 percent. For loans between 500,000 and 20 million, the government is the guarantor of 85 percent of the total, with banks accounting for the rest.

In this process, banks face an entirely new pressure: they are called upon to grant the emergency loans at lightning speed. Companies seeking a loan should get the nod within a maximum of 30 minutes, which is unheard of in an industry known for some complicated procedures and compliance issues. UBS, the Swiss No. 1, has ordered 300 bankers to help out in the corporate business and programmed 100 robots to help with the task.

Looking Closely

While the banks issued free money to ailing firms, insurers are facing calls to reimburse their clients for the damage. And the financial market supervisor has warned that it will keep an eye on the industry's capability to sustain their business at a time when damage claims will surge. So, while the state eased the capital requirement regulation for banks, insurers still face the same SST Swiss Solvency Test regime.

Finma's warning on Thursday, that the financial sector ought to show utmost restraint in respect to the dividend payment policy, for sure was meant for insurers as well as banks.

The Efforts Made by the Insurance Industry

The insurance industry's efforts to help their clients in this time of crisis is getting scant attention in the general upheaval. Some insurers – which are among the biggest property owners in the country – have offered corporate tenants to defer their payments. Axa, Switzerland's largest universal insurance company, which caught the headlines with the epidemic insurance contracts, is working on a package of measures aimed at small- and medium-sized firms, private clients and distribution partners to alleviate their situation in the current crisis and to make its contribution to pulling through.

Of course, it may not make much sense to have two industries measure to each other in times of an unprecedented health crisis. But bankers may for once appreciate not being the bogeymen.