At a glance
- Zurich's strategic review of its Personal Lines capabilities is based around four cornerstones
John Dyke, former chief financial officer for Zurich, gives his perspective on where Zurich has come from and, more importantly, in his new managing director role, where it is headed.
In 2010, Zurich was one of the first insurers to recognise that we had profitability issues with our motor account, which is now recognised as a market issue. We identified that bodily injury frequency, together with increased fraud, was something we had to combat. We increased our base rate to improve profitability on our held book, but also recognised that we didn’t have the fraud capabilities required, and therefore significantly reduced new business levels. We know this was a very difficult situation for brokers but we needed to take this action to stem the losses.
We then kicked off a full strategic review of our capabilities and have subsequently invested significantly, in line with our group’s general insurance strategy, which is built around four cornerstones:
1. Low-cost operating model
We recognise that we need to be low-cost, but also efficient and flexible. Our strategic third-party administrator (TPA) relationships allow us to create a model that plays to our strengths, which lie in underwriting, pricing, claims management and distribution through our regional sales teams. The service and administration process, flexibility of systems and resource management is a key strength of our TPAs. We now have the foundations in place for our new operating model that combines these strengths.
2. Underwriting and fraud protection
We have invested heavily in systems at the point of underwriting and at the claims stage to fundamentally reduce fraud. We have also invested in developing our teams to ensure we can effectively compete in what is a very challenging market.
3. Relationship and customer management
We recognised that we needed to organise ourselves by distribution channel and segment, so we have dedicated teams that manage regional brokers and national brokers. This new structure goes far beyond sales and distribution. Our claims, operations, finance, underwriting and pricing, and marketing teams sit around the same table as the ‘segment head’. The segment head has full operational and profitability targets for the business.
4. Claims transformation
We have made a significant investment in a new system that will make the entire claims process much more efficient and support our low-cost operating model. More importantly, this development is changing the mindset and behaviours within our claims teams, ensuring we apply the right level of customer engagement. This is manifested in three mantras we follow every time we ‘touch’ a claim: we take ownership, we move the claim forward, and we satisfy the customer.
So in summary, we are at a well-advanced stage of a journey. For me, it is really all about growing the business and taking our place as a significant player in the market. We want to do this by building our businesses together on a sustainable basis, where we make profit for you and profit for us, a relationship that is based upon a foundation of openness and trust, where when we say we will deliver something, we do – that will be our promise to you.