The Zurich Insurance Group has positioned its Luxembourg subsidiary as a European cross-border centre of excellence. Zurich has performed well recently, and its strategy 2014-2016 recognises the strong growth potential of the Grand Duchy.
Building on a good track record, an energetic management team will help us deliver innovative, specialist services in a range of selected corporate and individual life products. Zurich Eurolife’s chairman Gioia Ghezzi and CEO Xavier Nevez explain this fresh start.
Zurich Insurance Company Ltd is rated AA-, Aa3 and A+ by S&P, Moody’s and A.M. Best, with all three giving us a stable outlook. The Zurich Insurance Group remains well capitalized, with solid results including business operating profit of USD 4.7 bn in 2013 (up 15% compared with the previous year) and net income attributable to shareholders of USD 4.0 bn (up 4%). Its first quarter 2014 results were encouraging, showing early positive signs in the execution of the strategic targets for 2014 to 2016. Zurich is a global/local player, serving clients in more than 170 countries.
Group strategy is being refocused from a position of strength
Zurich’s strategy 2014–16 is designed to deliver sustainable, profitable growth in a changing and more competitive business environment. Luxembourg was identified as a market that offers growth opportunities. We are focusing on markets and customer segments where we have a competitive edge while turning around or exiting underperforming businesses. Zurich is also implemen-ting a program to streamline the company, removing management layers between the Group and its business units, and empowering our people to act decisively in delivering first-class services to our customers. Luxembourg will act as a hub serving business units throughout the Group. We are focusing on developing selected new cross-border market opportunities.
Zurich Eurolife in Luxembourg has been active since 1995 and will contribute more to this success story. We stepped up operations in 2008 to design and offer cross-border unit-linked life insurance to the HNWI/UHNWI segment and to provide death and disability protection for corporates, with a focus on their mobile employees. In March 2014 we had assets of €2.6 bn under management with a 148.3% solvency coverage ratio. We have offered captive and other services through Zurich International Services since 1988, and our presence in Luxembourg’s non-life market goes back to 1887.
Reshaping our portfolio
For a number of years, we have been the group’s centre of excellence for unit-linked dedicated funds products for HNWI. This is an important business and we are reviewing our product portfolio in light of developments in existing markets. We are also considering broadening our product offering towards the ‘mass affluent’ segment. In all of this we benefit from the Group’s experience, know-ledge and extensive distribution network. In addition, we are planning a range of new, tailored products from the Luxembourg hub.
Zurich Eurolife Luxembourg has become the European Economic Area (EEA) hub for the group’s new push into international group protection. We tailor solutions for multinational companies that need to move employees to different countries and guarantee them the same level of life and disability protection, no matter where they are based. We insure companies across all industry sectors – energy, financial and professional services, and construction are the largest. Zurich already has over two decades of experience in international group protection and it is exciting that we are receiving the Group’s backing as one of three global hubs. To this, Zurich Eurolife Luxembourg will add legal, tax and operations expertise. In this way, we will be able to service chosen elements of the Group’s Global Life business, including its protection and savings products.
New propositions under consideration
Both corporate and individual protection and savings solutions have clear potential if fully compliant with applicable regulations. We are working on selected opportunities in the protection and unit-linked space. In line with the Zurich’s strategy, we are not afraid to refocus our activities if a certain approach is no longer working, as this enables us to be stronger in other areas. We are reviewing our Group’s capabilities – such as corporate savings solutions – to assess if there are opportunities to provide similar solutions from Luxembourg. We have large operations in the Isle of Man with extensive international experience in this field, and in cooperation with our colleagues there we might bring this experience to bear in Luxembourg. This is just one example of how we can benefit from the Group’s extensive local network and capabilities.
We are working with internal partners throughout the Zurich Group to benefit from their specialist expertise and local presence, and likewise we are sharing our expertise on EEA cross-border business with others in the Group. At Zurich, our ambition is to be the best global insurer in the eyes of our customers, employees and shareholders. Luxembourg will play a key role in this exciting vision.
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