Zurich to phase out Middle East general insurance operations

Multi-line insurer Zurich is to scale back its general insurance business in the Middle East.

The firm said it will begin a phased closing to new retail and small business customers in its general insurance business in the region from November 30, 2015.

Subject to an assessment of contractual obligations, existing portfolios in this business will be put into run off. This means that Zurich will effectively exit its general insurance businesses by the end of 2016, or as soon as possible thereafter.

Zurich said that the decision will only affect the general insurance business in the Middle East and that it remains firmly committed to its life insurance business.

Zurich’s global corporate business will continue to underwrite new policies under the Dubai International Financial Centre (DIFC) reinsurance license and will stop underwriting new policies under the onshore license through branches in UAE, Oman, Kuwait, Qatar, Bahrain and Lebanon.

The insurer explained that the decision follows a comprehensive review of its general insurance business in line with the group’s strategy to focus on its core business by prioritising investment in markets where it sees the best potential for growth, managing other markets for value, and turning around or exiting underperforming markets.

According to the firm, the review found that while the Middle East remains an attractive market, there was limited potential for the general insurance business of Zurich to profitably grow its business in the region and achieve an operating scale that warranted the continuing investment of capital and management resources.

The firm will continue to service its existing policies in the general insurance business for the remainder of their duration, as well as ongoing claims management and the fulfilment of its obligations to customers.

The changes mean that a number of jobs will change or cease to exist, according to Zurich, although it said it is yet unclear how many roles will be affected.

“This has been a difficult decision for Zurich, reflecting the challenges of building a strong and profitable franchise across multiple markets in the region in the current economic environment,” said Brian Reilly, chief executive officer (CEO) of Zurich’s general insurance business in the Middle East.

“Zurich deeply regrets the impact on our employees and the inconvenience to our general insurance customers and partners across the region.”

Jawed Barna, CEO of Zurich’s life insurance business, added: “Retail and corporate customers and distributors of Zurich’s life business will continue to receive the same quality of service and product choice that they have received in the past.

“The Middle East will remain one of the key markets for Zurich’s global life offering.”