Zurich international business expands
By Holly Booth | Published May 21, 2012
Swiss global insurance giant, Zurich, is on a profitable track this year, with positive results coming in from the First Quarter reports.
The group reported a total business operating profit of US$ 1.4 billion for the First Quarter of 2012 with an operating profit increase in the General Insurance sector of US$ 567 million to US$ 856 million.
It appears that Zurich may be overcoming difficulties in the European markets by focusing on forming new alliances and acquisitions internationally.
The international markets division contributed US$ 1.3 billion of Zurich’s first-quarter gross written premiums resulting in an increase of USD $240 million when compared to the results from this same time last year.
The Asia-Pacific region alone witnessed 16 percent growth partly due to the renaming of the Malaysian MAA to the Zurich brand towards the end of 2011. Also to be taken into consideration is the fact that, as of last month, Zurich is now the provider of wealth insurance products to HSBC clients in the Bahrain, Qatar and the United Arab Emirates after signing a 10 year exclusive distribution agreement; additionally, the company now has license to access their target market segments for life insurance products in Singapore as well.
Zurich’s most notable area of growth however, lies in the markets of Latin America. The group recently acquired Banco Santander’s insurance business and has witnessed a positive impact since then as an overall growth of 50 percent was reported.
The life insurance sector of Zurich contributes one-third of the groups’ total global business, and Banco Santander continues to boost performance in this area as Brazilian sales of individual protection policies enabled a 16 percent year-on-year increase in life gross written premiums. Gross written premiums in non life have also witnessed noticeable improvements and increased from US$ 370 million to US$ 10.5 billion. However, such growth has, of course, been counterbalanced by the continuing decline of European markets.
As the Debt crisis continues in Europe, Zurich is considering how else it can expand and is now looking towards making more progress in Asia. Indonesia in particular is experiencing a flurry of activity, and Chief Executive Kevin Hogan believes the country’s increasing income and resulting capability to pay for individual protection offers a “tremendous opportunity for growth”.
In 2011, Indonesia’s economy experienced the fastest growth it has had since 1996 and grew 6.5 percent. It would seem therefore, that the population is becoming wealthier and has more to protect as a result.
Zurich noted this 3 years ago and made a head start when it took on Mayapada Life; Zurich presently controls 80 percent of the now renamed Zurich Topas Life company. Up until recently, the company could only offer coverage for car and home insurance but now that they have been granted a license to add life insurance to their services, Zurich Topas life will no doubt continue to expand and interest more of the Indonesian market.
Although there are already well established insurers in Indonesia, Zurich hopes its personal strategies will give it the edge it needs to stand out and continue to make improvements. Zurich Topas Life has previously collaborated with Bank Mayapada International but is looking to explore more opportunities to join forces with other Indonesian banks so as to further distribute their products.
As the European climate continues to remain unstable, it would seem Zurich has the right idea by looking towards international possibilities for growth and expansion. The impact of the global developments that the group has made so far are clearly bringing in positive results for the company and it will be interesting to see what directions they choose to take in the future.