At a glance
- Zurich's years of expertise make it a reliable partner in the current economic turmoil.
As the UK and the wider international business community make their way through the ongoing economic turmoil, offering a strong financial arm for policyholders to lean on is essential.
At Zurich, a strong financial base has been fostered over many years, and while it has become fashionable to extol the virtues of underwriting for profit and not relying on investment returns, this is an approach Zurich has taken for many years.
“I think Zurich has always stressed the importance of being an underwriting company,” says John Dyke, Chief Financial Officer, UK General Insurance and Shared Services. “We are ambitious and we have certain targets, but there is a technical price that we will not go under simply to achieve volume.”
Although this is the consensus view in the market at the moment, John believes there will be numerous carriers that break ranks in the future as the investment outlook improves. However, this is not something he expects Zurich to do.
A stable investment strategy
Since the financial crisis struck, John says Zurich has not had to change its strategic asset allocation and similarly, when things improve, he does not see there being any dramatic shift in how the business invests its money.
Instead, the priority is on generating a reliable and predicable return that underpins the company’s strength and gives confidence to policyholders, brokers and shareholders alike. As he says: “We want to make a financial return, but we do not want to be too greedy.”
While Zurich may be sticking to its guns around pricing and investment strategy, this does not mean it cannot help its brokers manage costs for clients and keep their premiums to a minimum.
Indeed, he feels that while the financial crisis has made policyholders more price sensitive, it has also made them more aware of the importance of added value services such as risk management.
Similarly, the depressed credit environment has pushed policyholders to really value the claims service that is on offer and seek out those insurers that can deliver if called upon. He comments: “Brokers must look for insurers that have the capital backing to be there when claims need to be paid.”
Financial strength matters more than ever
Appraising the financial strength of insurers is not an easy task and while the global brokers may have the internal resource and expertise to do this, many smaller firms will not.
To this end, the credit rating of an insurer is an important guide for brokers when it comes to highlighting the financial strength of a particular carrier. Similarly, keeping a look out for quarterly results, stock price performance and strategy announcements will also help brokers get under the skin of the insurers they work with.
John adds that one result of the financial crisis is that many brokers are looking to work with fewer insurers, to build a deeper relationship with them and grow the trust and understanding that exists between the two businesses.
This two-way approach is essential, and he says: “As much as insurers look to work with brokers who they can trust to deliver good quality business, brokers should be looking for the same sorts of things from their insurers.”
One example of where brokers could benefit from these closer relationships is in gaining access to the expertise Zurich carries when it comes to gathering in client money.
“For a smaller broker,” he says, “we can help. We have a lot of experience in collecting debts and can potentially help by discussing techniques and processes that can be used.”
What is essential, as far as John is concerned, is that where brokers are experiencing pinch points in their cash flow, they enter into a discussion and utilise the expertise that Zurich can provide.
As John says: “I would like to have open conversations with brokers about these issues, and do not want to be in a position where the first we know of a problem is when the broker is no longer in existence.”
Whether it is in providing a safe home for clients’ risks, a reliable claims response for policy holders or giving brokers access to expertise, John passionately believes Zurich’s aim is to be a constant in these troubled times.