Zurich Insurance Group disclosed plans to combine its Corporate and Commercial businesses into a single Commercial Insurance unit, and a former AIG executive will help lead it.
James Shea will be Zurich’s CEO Commercial Insurance. He was previously AIG’s president of Global Financial Lines, according to the Zurich announcement.
Zurich’s move fulfills part of a promise new CEO Mario Greco made upon his arrival at the company in March to begin simplifying Zurich’s organizational chart. In June, Greco, the former head of Italy’s Assicurazioni Generali SpA, later suggested that Zurich Global Corpoate and Zurich’s General Insurance would be combined at some point into a unified commercial business.
Greco has a mandate to overhaul Zurich – Switzerland’s largest insurer – and boost profitability. That has translated into cutting jobs, asset sales, stricter underwriting guidelines and streamlining of various units.
Zurich’s General insurance arm reported $1.2 billion in profit during the 2016 first half, a 3 percent rise. Net income declined to $739 million, versus $840 million over the same period in 2015, due, in part to natural disaster claims and restructuring charges.
Greco said that combining Zurich’s Corporate and Commercial arms simply made sense on a practical level.
The move “allows us to better utilize our skills, systems and capabilities in the individual countries and across the world, and to unite our customer interaction and go-to-market approach worldwide,” Greco said in prepared remarks.
Zurich’s combined Commercial Insurance arm has a reach of five continents, the insurer said.
The move comes, however, as U.S. commercial insurance prices continue to remain stagnant. Prices in aggregate for the sector ticked up by less than 1 percent in the 2016 second quarter, similar to the pace set in Q1, according to Willis Towers Watson’s latest Commercial Lines Insurance Pricing Survey.
As part of the reorganization, Zurich said it established a new Global Specialty Lines function within Commercial Insurance that will handle credit lines (Political Risk, Surety and Trade Credit), Marine, Aviation and Energy.
Also, Shea’s arrival means that Thomas Hürlimann will be leaving his role as CEO of Global Corporate after more than 10 years with the division, and five as its leader. He’ll remain to ensure a smooth transition and then work on special projects, reporting to the group CEO, Zurich said.
Meanwhile Zurich’s Board of Directors made the following appointments to its Executive Committee, effective Oct. 1: Shea, Zurich Latin American CEO Claudia Dill, and Zurich Asia Pacific CEO Jack Howell.
Source: Zurich Insurance