Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — Zurich Financial Services — UBS Swiss Alpine Summit 2007
21 slides from Zurich Insurance's conference presentation, Jan 19, 2007
Slide 1: Zurich Financial Services – UBS Swiss Alpine Summit
Zurich Financial Services – UBS Swiss Alpine Summit Dieter Wemmer, CEO Europe General Insurance Gstaad, January 19, 2007
Slide 2: Disclaimer and cautionary statement
Disclaimer and cautionary statement Certain statements in this document are forward-looking statements, including, but not limited to, statements that are predications of or indicate future events, trends, plans or objectives. Forward-looking statements include statements regarding our targeted prof
Slide 3: A track record of performance improvements
A track record of performance improvements Business Operating Profit (in USD millions) Return on common shareholders’ equity 5'000 20% 19.4%2 4'286 15.5% 3'947 12.1% 13.6%1 4'000 10% 2'9881 3'000 2'316 0% 2'000 1'175 1'000 -10% -20.8% 0 -20% 2002 2003 2004 2005 9m06 2002 2003 2004 2005 9m06 Sharehol
Slide 4: Zurich has a well diversified, global book
Zurich has a well diversified, global book Business Operating Profit by segment1,2 Business Operating Profit General Insurance1,3 Int’l Businesses 4% Global Corporate Other 19% Businesses Europe USD 432m General 44% North Insurance 33% America Farmers Commercial Mgmt. Services General USD 919m Insur
Slide 5: Update on The Zurich Way – revised target of USD 2 billion for 2007 to 2009
Update on The Zurich Way – revised target of USD 2 billion for 2007 to 2009 Total planned benefits • The 2006 target is well on track. 2007 to 2009: • We increase the 2007 target to USD 700m. USD 2 billion • Developing our three year plan, we expect benefits of USD 2 billion from USD 2007 to 2009. 7
Slide 6: Implementation examples in our Business Divisions
Implementation examples in our Business Divisions • Europe General Insurance (EGI) • North America Commercial (NAC) • Global Life • Farmers Management Services 6 © Zurich Financial Services - UBS Swiss Alpine Summit, January 19, 2007
Slide 7: Delivering on our vision and key focus areas for Europe General Insurance (EGI)
Delivering on our vision and key focus areas for Europe General Insurance (EGI) 2010 vision We are implementing pan-European strategies and platforms to consolidate our competitive advantage throughout the value chain • Leading European insurer with top-tier positions in chosen markets • Cost leader
Slide 8: The EGI Country Blue Print enables better customer service, new business growth and…
The EGI Country Blue Print enables better customer service, new business growth and… Customer Management Enabling functions Customer Customer Interface Units (CU) Strategic Marketing (Proposition Development) Market Management Agents/ CU Brokers Technical Underwriting (Product Development) Direct CU
Slide 9: …helps bundling cost savings opportunities with Customer Services & Shared Services
…helps bundling cost savings opportunities with “Customer Services” & “Shared Services” as main levers • European Shared Services, Phase 2 - Further refine “Hub & satellite” • Business Operating Model approach - Pan-European • Various strategic projects on the way - Standardization e.g. in finance,
Slide 10: Our pan-European strategy in a nutshell – our common platform
Our pan-European strategy in a nutshell – our common platform Support 8 On 7 lines On 1 processing / Business Units of business IT platform • Direct Switzerland Corporate & Specialties Germany • Commercial Fast Flow Commercial UK • Personal Lines Personal Shared Sales • Commercial Lines platform • C
Slide 11: Our main initiatives to achieve a 20% Expense Ratio for Europe General Insurance
Our main initiatives to achieve a 20% Expense Ratio for Europe General Insurance in the medium-term • One UK General Insurance organization • Capitalize on leveraging pan-European platforms • Scale effects on premiums, driven by market segmentation, multi-channel distribution and customer centricity
Slide 12: Implementation examples in our Business Divisions
Implementation examples in our Business Divisions • Europe General Insurance (EGI) • North America Commercial (NAC) • Global Life • Farmers Management Services 12 © Zurich Financial Services - UBS Swiss Alpine Summit, January 19, 2007
Slide 13: NAC establishing technical discipline – 1st wave of TZW initiatives fully implemented
NAC establishing technical discipline – 1st wave of TZW initiatives fully implemented1 Establishing Technical Discipline Underwriting Claims “Charging the right price for “Paying the appropriate the underlying risk” amount per claim merits” • Upgraded Technical Price sophistication • Establish best
Slide 14: NAC enabling profitable growth – portfolio reshaped to maximize profit per unit of risk
NAC enabling profitable growth – portfolio reshaped to maximize profit per unit of risk • Divide our businesses into 68 market Force rank businesses to balance capital baskets for making capital allocation intensity with operating profit decisions Market Basket • Analyze performance using two lenses
Slide 15: NAC managing risk profile and optimizing capital use
NAC managing risk profile and optimizing capital use Multi-line account with Good fire Acceptable Other acceptable quality? risk? wind quality? criteria? Detailed Submissions CAT Quote Exposure Analysis No No No No Accounts that do not pass the filters are flagged for special attention and compellin
Slide 16: Implementation examples in our Business Divisions
Implementation examples in our Business Divisions • Europe General Insurance (EGI) • North America Commercial (NAC) • Global Life • Farmers Management Services 16 © Zurich Financial Services - UBS Swiss Alpine Summit, January 19, 2007
Slide 17: Global Life – After fixing profitability, our focus is now on growth
Global Life – After fixing profitability, our focus is now on growth New business APE Business operating profit (BOP)3 in USD millions in USD millions CAGR CAGR 3% 10% 2'403 2'303 2 2'134 1079 2'082 934 2'008 741 746 856 9 months 2006: • APE +14%5 • NBP +33%4,5 2001 2002 2003 2004 2005 2001 2002 200
Slide 18: We radically changed the Global Life business model in multiple markets
We radically changed the Global Life business model in multiple markets UK Germany Switzerland Zurich International1 • Consolidated • Service company • Changed business • Business world- legal entities model model for group wide written on pension business one single balance • Separated • Restructur
Slide 19: Illustrative implementation examples in our Business Divisions
Illustrative implementation examples in our Business Divisions • Europe General Insurance (EGI) • North America Commercial (NAC) • Global Life • Farmers Management Services 19 © Zurich Financial Services - UBS Swiss Alpine Summit, January 19, 2007
Slide 20: Farmers is driving profitable growth through improved customer service, new products, and distribution
Farmers is driving profitable growth through improved customer service, new products, and distribution • Focus on customer service, product management and distribution Property 25% • Further improve penetration in existing core states in the Western U.S. with: - sophisticated customer segmentation a
Slide 21: Key take aways from Zurich
Key take aways from Zurich • Zurich has a track record of strong performance improvements and has continuously delivered excellent results. • Zurich is well diversified by lines of business and geography, and we have achieved selective growth in the nine months to September 30, 2006. • We are drivin
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