Zurich faces ‘perfect storm’
According to Post, Zurich UK general insurance CEO, Vibhu Sharma has blamed ‘a perfect storm’ of tough market conditions and greater than normal large losses for a plummeting business operating profit in the third quarter of 2015.
For Q3 the insurer’s UK general insurance operation delivered a 48% reduction in operating profit, which shrank from £178.8m at the same point last year to £92.6m.
Vibhu Sharma said, ‘Three months ago we were in the middle of a perfect storm of a really difficult market and greater than normal large losses. We are still seeing large losses above our expectations and have experienced about 18 months’ worth in the first nine months of this year.
‘But what’s exacerbating this is that the conditions which create this challenging market have accelerated – and that’s across all tiers of the market from personal lines to global corporate.
‘Rate increases in the market are slowing down, and rate is falling in some areas. On top of that, industry loss trends are increasing, especially in motor as we see more vehicles on the road because of the growing economy and cheaper fuel. We will stand by our underwriting and pricing disciplines, focusing on profit rather than volume.’
He added, ‘We’re operating in a market where winning and retaining business relies more than ever on the extra value we bring to customers – whether that’s our expertise in helping them understand and manage risk, or our first class claims handling. We always work hard to win and retain business of course, and where we are letting business go, we’re doing it for the right reasons.
‘But we can’t be complacent – we need to make sure our business stays strong. Zurich is a financially robust organisation, both globally and in the UK. This is a huge asset to us, and one which sets us above many of our peers. Our strategy is unchanged and we will keep delivering on our promises whatever the market throws at us.’