Disruption trumps M&A/emerging markets in search for high growth: Zurich CEO
Zurich Insurance Group need not pursue growth through major mergers and acquisitions (M&A) deals nor emerging market ventures and should rather swear off distractions from the major transformations underway in the industry, including the promise of digital disruption, Mario Greco (pictured), group chief executive officer of the company, said Wednesday.
"We are not counting on consolidation," Greco said during a Reuters webinar. "The insurance world is in complete transformation: in a world in transformation insurance has to transform even faster."
"If you need to transform yourself, acquiring another business in need of transformation is not a great solution," Greco said.
Zurich will continue to look at M&A deals where "specific assets" can meet "specific needs," Greco said. "But we don't think the answer is consolidation - we think that the solution is providing customers with what they need in this changing world."
Transformation is Greco's motto across a swath of topics, from the global shift to net zero emissions, to the broader pillars of ESG and the advent of digital solutions across his industry.
Not only is M&A superfluous, but seeking growth in high growth markets as well.
"It is just not true for insurance" that growth equals emerging market, Greco said.
"In an industry transformation you can grow in traditional markets just by doing things that the others don't do," he said. Zurich is achieving its best growth rates in Germany and above-par growth in other traditional European markets as well, he claimed.
"Being innovative and riding digitisation allowed us to report very high growth in these countries," Greco said. "If you are innovative, if you are disruptive, if you serve the customer .... they will reward you and you will grow."
That said, Greco expressed regret at his company's prior exit from the promising Chinese retail market, where "it is difficult to re-enter once you sell" and prior position would be "hard to replicate." Commercial insurance operations in China continue to provide their growth.
The opening of the Indian market "creates an opportunity to at least look," but Zurich will go slow. No declaration is likely in 2022, he indicated.
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