Zurich revamp sees life and general insurance merger

Zurich Insurance Group has begun a process to “reshape and simplify” its business by bringing its life and general insurance businesses together, and reorganising its management.

In a statement issued today, the insurance company’s new chief executive, Mario Greco, also announced that Kristof Terryn, who had been involved in an earlier revamping of the company’s general insurance operations, is to take on the new role of chief operating officer, while global life chief executive Gary Shaughnessy will become Zurich’s chief executive for Europe, Middle East and Africa.

As reported, Greco took over as the head of Zurich – Switzerland’s largest insurance company – in March, following a difficult time for the company, during which it was forced to abandon a planned takeover after an unexpected rise in claims.

Also today, Zurich announced that chief operations and technology officer Robert Dickie, who joined the firm in March 2014, is to leave the company.

Complicated structure

In its statement, Zurich said that the restructuring was aimed at simplifying the company’s management structure in order to improve efficiency and, in some cases, to remove internal barriers which at times have meant that different parts of the group could have been competing with each other.

“This new organisation will be more agile and more accountable, with a clearer line of sight between the top of the company and the people looking after our customers,” Greco said.

“We will approach our target customers with a unified and distinctive face to the market.”

New role

In his new role of chief operating officer, Terryn will focus on operations and technology as well as underwriting, claims, reinsurance, actuarial and pricing, Zurich said.

Greco added that the business has been improving its profitability in recent months, “as evidenced by 2016 first quarter results”. He added that the new structure would support Zurich’s previously announced cost-cutting programme, but that this was not his main motivation.

Zurich, returned to profit in the first three months of 2016 and is in the middle of a US$1bn cost-savings drive it has said is set to affect around 8,000 jobs by the end of 2018. Zurich currently has around 55,000 employees worldwide.

Further redundancies

Zurich said the new structure would be likely to lead to further redundancies but that it was too early at this stage to quantify these.

In the first quarter, Zurich’s global life business generated operating profit of US$317m on business volume of US$7.4bn. Overall group operating profit was US$1.1bn on business volume of $17.6bn.

ABOUT THE AUTHOR
Gary Robinson
Deputy Editor, International Investment and Head of Video at Open Door Media Publishing. A fully qualified journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as an IFA.

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