Zurich tackles commercial operations in North America
Zurich Insurance Group wants to improve the performance of its commercial insurance business in North America in order to lower the combined ratio of its overall operations in the region.
The combined ratio of its commercial insurance business in North America should improve by growing in profitable segments, rebalancing long-tail exposure and the use of technology, according to a Dec. 5, 2019 Investor Day presentation.
The company is planning to reduce the combined ratio of its commercial business in North America by 3 percentage points by 2021 from 99.4 percent in the first half of 2018.
In order to achieve this target, Zurich is rebalancing its long-tail exposure by focusing on growth in property, targeting growth in selected special lines and making use of strategic reinsurance.
The insurer is also seeking profitable growth in targeted customer segments by enhancing its go-to market approach in the “middle market”, solidifying its position in the large customer space by launching segment specific value propositions and value-added services.
In addition, Zurich wants to take advantage of technology such as data and predictive analytics to generate risk insights, enhance technical development for market facing underwriters and increase the use of risk engineering by growing virtual and field teams.
As part of the overall strategy in North America, Zurich wants to solidify its position in large commercial lines, bolster the middle market presence while growing in in alternative retail markets.
The commercial business has been identified as the reason why Zurich is lagging top peers with regards to the combined ratio in North America, according to the presentation. Zurich North America’s first half 2018 combined ratio of 96.5 percent is 4 percentage points higher than the one of its top peers which include AIG, CNA, Chubb, Hartford and Travelers, according to the presentation. While the commercial insurance business should improve its combined ratio, Zurich wants to grow its alternative markets business.
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