Zurich Financial Services
Encyclopedia
Zurich Financial Services AG is a major financial services
group based in Zurich
, Switzerland
.
comprising Eagle Star
(acquired in 1984), Allied Dunbar
(acquired in 1985) and the Farmers Group, Inc.
(acquired in 1988), for $18.6 billion.
In 2000 the structure of business, which had previously involved dual holding companies (Allied Zurich plc in the UK
and Zurich Allied AG in Switzerland
), was unified to form one holding company - Zurich Financial Services.
In 2008, Zurich
launched its biggest global campaign, and while some of the messaging is about the health of the company's balance sheet (when it recovered, it focused on its core business and avoided risky growth strategies), the effort was developed mainly to assuage consumers' mistrust of the insurance companies in general.
In June 2010 Zurich announced it is creating 240 jobs in Ireland, according to Minister for Enterprise, Trade and Innovation, Batt O'Keeffe TD.
In July 2011 Zurich Financial Services Group (Zurich) announced that it signed definitive agreements with Banco Santander SA (Santander) to enter into a long-term alliance of 25 years in Latin America.
The organisation is split into 3 business segments:
and 3 operating regions:
General Insurance is the largest segment. Within General Insurance, individual business areas focus on specific segments and markets where they see opportunities for sustained and profitable growth.
It is split into a number of divisions:
, Zurich's key markets in Europe are Austria
, Germany
, Ireland
, Italy
, Portugal
, Russia
, Spain
, Turkey
and the United Kingdom
.
Zurich has major offices in many of the major financial cities in these countries including, London
, Birmingham
, Leeds
, Glasgow
, Dublin, Frankfurt
, Rome
, Milan
and the headquarters in Zurich.
The US consumer market is served primarily by Farmers Insurance Group the third largest personal lines property & casualty insurance group in America. Founded in 1928, the Farmers Exchanges and their subsidiaries, which are Zurich managed but not Zurich owned, operate in 41 states through a network of 17,000 exclusive agents and 1,100 independent agents.
The Chicago area-based Zurich American Insurance Company is the third largest provider of commercial property-casualty insurance in North America, serving small business, mid-size markets and large corporate customers. In 2005, Zurich Commercial produced gross written premiums of USD 12.5 billion.
Other Zurich companies in North America include:
and price fixing
. "Businesses shopping for commercial insurance were deceived into believing they were getting the best deals available," said Abbott. "The whole anti-competitive scheme was an intentional smoke screen by several insurance players to artificially inflate premiums and pay improper commissions to those who brokered the deals." The states included in the settlement were Texas
, California
, Florida
, Hawaii
, Maryland
, Massachusetts
, Oregon
, Pennsylvania
and West Virginia
. Zurich is also required to pay about $122 million in refunds to commercial policyholders in a New Jersey class action lawsuit settlement.
Zurich Financial Services settled a bid-rigging and improper "finite reinsurance" transactions probe. Zurich Financial agreed to pay $153 million in restitution and penalties and agreed to a series of reforms. Zurich apologized and acknowledged that "certain of its employees violated both acceptable business practices and Zurich's own standards of conduct by engaging in improper bidding practices and the ‘finite reinsurance’ transactions described in the Assurance of Discontinuance." The states included in the settlement were New York, Connecticut and Illinois.
In May 2007, Zurich Capital Markets, a subsidiary of Zurich Financial Services, paid $16.8 million to settle with the United States Securities and Exchange Commission
for helping four hedge funds disguise their identities to avoid detection when making frequent trades in mutual fund
shares. An SEC director stated, “By knowingly financing their hedge funds clients' deceptive market timing
, ZCM reaped substantial fees at the expense of long-term mutual-fund shareholders"
On May 5, 2008 Zurich announced a further 900 job losses in the general insurance sector of their UK operation.
Financial services
Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies,...
group based in Zurich
Zürich
Zurich is the largest city in Switzerland and the capital of the canton of Zurich. It is located in central Switzerland at the northwestern tip of Lake Zurich...
, Switzerland
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
.
History
The Company was founded in 1872 as subsidiary of the Schweiz Marine Insurance Company under the name Versicherung Verein (Insurance Club). The Company changed its name to Zurich Marine and Accident Insurance in 1875 and to Zurich General Accident and Liability Insurance in 1894. In 1982 the Company acquired Altstadt Compagnie d'Assurances SA in Switzerland. In 1998 the Company acquired British American Financial Services, a business owned by BAT IndustriesBritish American Tobacco
British American Tobacco p.l.c. is a global tobacco company headquartered in London, United Kingdom. It is the world’s second largest quoted tobacco company by global market share , with a leading position in more than 50 countries and a presence in more than 180 countries...
comprising Eagle Star
Eagle Star Insurance
The Eagle Star Insurance Company plc was a leading British insurance business. It underwrote the full range of risks, including fire, accident, marine, motor, life, contingency and Pluvius insurance...
(acquired in 1984), Allied Dunbar
Allied Dunbar
Allied Dunbar was a large British assurance group. In its early years as Hambro Life Assurance it was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index...
(acquired in 1985) and the Farmers Group, Inc.
Farmers Group, Inc.
The Farmers Insurance Group of Companies is a Swiss owned personal lines property and casualty insurance group providing homeowners insurance, auto insurance, life insurance, and financial services in the United States. It is the third largest insurance group in the US servicing over 10 million...
(acquired in 1988), for $18.6 billion.
In 2000 the structure of business, which had previously involved dual holding companies (Allied Zurich plc in the UK
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
and Zurich Allied AG in Switzerland
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
), was unified to form one holding company - Zurich Financial Services.
In 2008, Zurich
Zürich
Zurich is the largest city in Switzerland and the capital of the canton of Zurich. It is located in central Switzerland at the northwestern tip of Lake Zurich...
launched its biggest global campaign, and while some of the messaging is about the health of the company's balance sheet (when it recovered, it focused on its core business and avoided risky growth strategies), the effort was developed mainly to assuage consumers' mistrust of the insurance companies in general.
In June 2010 Zurich announced it is creating 240 jobs in Ireland, according to Minister for Enterprise, Trade and Innovation, Batt O'Keeffe TD.
In July 2011 Zurich Financial Services Group (Zurich) announced that it signed definitive agreements with Banco Santander SA (Santander) to enter into a long-term alliance of 25 years in Latin America.
Structure
The Zurich Financial Services Group is a leading supplier of Insurance and Risk Management, specialising in both Life and General Insurance.The organisation is split into 3 business segments:
- General Insurance (led by CEO Mario Greco)
- Global Life (led by CEO Kevin Hogan)
- Farmers (led by CEO Paul Hopkins)
and 3 operating regions:
- Europe and Africa (led by Regional Chairman Dieter Wemmer)
- Americas (led by Regional Chairman Paul Hopkins)
- Asia Pacific Middle East (led by Regional Chairman Geoff Riddell)
| Segment/Region | Europe & Africa | Asia Pacific Middle East | Americas | |
| Group | Martin Senn | Dieter Wemmer | Geoff Riddell | Paul Hopkins |
| General Insurance | Mario Greco | Markus Hongler | n/a | Mike Foley |
| Global Life | Kevin Hogan | David Sims | Dan Bardin | David Dietz & Jose Orlando |
| Farmers | Paul Hopkins | n/a | n/a | Paul Hopkins |
General Insurance
General Insurance serves individuals, small and medium-sized businesses, commercial enterprises and major multinational corporations.General Insurance is the largest segment. Within General Insurance, individual business areas focus on specific segments and markets where they see opportunities for sustained and profitable growth.
It is split into a number of divisions:
- The Europe and Africa(led by Markus Hongler) division offers personal and commercial products through brokers and exclusive agents, independent financial advisers, by phone and through the Internet.
- North America Commercial (led by Mike Foley) business division serves small and mid-sized businesses and commercial market segments, including specialty lines and the programs sector.
- The Americas division manages the American business.
- Global Corporate (led by Mario Vitale) business division, sells domestic and international insurance to national and multinational corporations.
- The Asia Pacific and Middle East division operates in Asia Pacific, the Middle East and other markets. It serves personal lines and commercial customers directly.
Farmers
The Farmers Insurance Group of Companies is a personal lines property and casualty insurance group providing homeowners insurance, auto insurance, life insurance, and financial services in the United States. It is the third largest insurance group in the US servicing over 10 million households in 41 states. Farmers Group Inc. is headquartered in Los Angeles, California but is 100% owned by Zurich Financial Services based in Zurich, Switzerland.World Wide Operations and Territories
Zurich manages its business within 3 geographical areas:- Europe & Africa (led by Dieter Wemmer)
- Americas (led by Paul Hopkins)
- Asia Pacific & Middle East (led by Geoff Riddell)
Europe & Africa
Besides its home market SwitzerlandSwitzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
, Zurich's key markets in Europe are Austria
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, Ireland
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...
, Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
, Portugal
Portugal
Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...
, Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
, Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
, Turkey
Turkey
Turkey , known officially as the Republic of Turkey , is a Eurasian country located in Western Asia and in East Thrace in Southeastern Europe...
and the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
.
Zurich has major offices in many of the major financial cities in these countries including, London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, Birmingham
Birmingham
Birmingham is a city and metropolitan borough in the West Midlands of England. It is the most populous British city outside the capital London, with a population of 1,036,900 , and lies at the heart of the West Midlands conurbation, the second most populous urban area in the United Kingdom with a...
, Leeds
Leeds
Leeds is a city and metropolitan borough in West Yorkshire, England. In 2001 Leeds' main urban subdivision had a population of 443,247, while the entire city has a population of 798,800 , making it the 30th-most populous city in the European Union.Leeds is the cultural, financial and commercial...
, Glasgow
Glasgow
Glasgow is the largest city in Scotland and third most populous in the United Kingdom. The city is situated on the River Clyde in the country's west central lowlands...
, Dublin, Frankfurt
Frankfurt
Frankfurt am Main , commonly known simply as Frankfurt, is the largest city in the German state of Hesse and the fifth-largest city in Germany, with a 2010 population of 688,249. The urban area had an estimated population of 2,300,000 in 2010...
, Rome
Rome
Rome is the capital of Italy and the country's largest and most populated city and comune, with over 2.7 million residents in . The city is located in the central-western portion of the Italian Peninsula, on the Tiber River within the Lazio region of Italy.Rome's history spans two and a half...
, Milan
Milan
Milan is the second-largest city in Italy and the capital city of the region of Lombardy and of the province of Milan. The city proper has a population of about 1.3 million, while its urban area, roughly coinciding with its administrative province and the bordering Province of Monza and Brianza ,...
and the headquarters in Zurich.
Americas
In 1912, Zurich became the first foreign insurer to enter the US market.The US consumer market is served primarily by Farmers Insurance Group the third largest personal lines property & casualty insurance group in America. Founded in 1928, the Farmers Exchanges and their subsidiaries, which are Zurich managed but not Zurich owned, operate in 41 states through a network of 17,000 exclusive agents and 1,100 independent agents.
The Chicago area-based Zurich American Insurance Company is the third largest provider of commercial property-casualty insurance in North America, serving small business, mid-size markets and large corporate customers. In 2005, Zurich Commercial produced gross written premiums of USD 12.5 billion.
Other Zurich companies in North America include:
- Centre Group Holdings - New York CityNew York CityNew York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, New YorkNew YorkNew York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east... - Farmers New World Life Insurance Company - Mercer Island, WashingtonMercer Island, WashingtonMercer Island is a city in King County, Washington, United States and the name of the island in Lake Washington on which the city sits. The population was 22,699 at the 2010 census....
- Zurich Direct Markets (former Universal Underwriters Group) - Overland ParkOverland Park, Kansas-Demographics:As of the census of 2000, there were 149,080 people, 59,703 households, and 39,702 families residing in the city. The population density was 2,627.0 people per square mile . There were 62,586 housing units at an average density of 1,102.9 per square mile...
, KansasKansasKansas is a US state located in the Midwestern United States. It is named after the Kansas River which flows through it, which in turn was named after the Kansa Native American tribe, which inhabited the area. The tribe's name is often said to mean "people of the wind" or "people of the south... - Zurich Holding Company of America, Inc. - SchaumburgSchaumburg, IllinoisSchaumburg is a city located in Cook County in northeastern Illinois. A common misspelling of the city name is Schaumberg, a spelling which persists on some modern maps. Schaumburg is located just under northwest of downtown Chicago and approximately northwest of O'Hare International Airport. As...
, IllinoisIllinoisIllinois is the fifth-most populous state of the United States of America, and is often noted for being a microcosm of the entire country. With Chicago in the northeast, small industrial cities and great agricultural productivity in central and northern Illinois, and natural resources like coal,... - Kemper Investors Life Insurance Co. - BellevueBellevue, WashingtonBellevue is a city in the Eastside region of King County, Washington, United States, across Lake Washington from Seattle. Long known as a suburb or satellite city of Seattle, it is now categorized as an edge city or a boomburb. The population was 122,363 at the 2010 census.Downtown Bellevue is...
, Washington - 21st Century Insurance21st Century Insurance21st Century Insurance is an auto insurance company and is wholly owned by the Farmers Insurance Group of Companies®. They are headquartered in Wilmington, Delaware, and provide private passenger auto insurance in 48 states and the District of Columbia....
- Wilmington, DelawareWilmington, DelawareWilmington is the largest city in the state of Delaware, United States, and is located at the confluence of the Christina River and Brandywine Creek, near where the Christina flows into the Delaware River. It is the county seat of New Castle County and one of the major cities in the Delaware Valley...
Criticism
In 2006, Zurich Financial Services settled a $171 million case relating to bid riggingBid rigging
Bid rigging is a form of fraud in which a commercial contract is promised to one party even though for the sake of appearance several other parties also present a bid. This form of collusion is illegal in most countries...
and price fixing
Price fixing
Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand...
. "Businesses shopping for commercial insurance were deceived into believing they were getting the best deals available," said Abbott. "The whole anti-competitive scheme was an intentional smoke screen by several insurance players to artificially inflate premiums and pay improper commissions to those who brokered the deals." The states included in the settlement were Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
, California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
, Florida
Florida
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
, Hawaii
Hawaii
Hawaii is the newest of the 50 U.S. states , and is the only U.S. state made up entirely of islands. It is the northernmost island group in Polynesia, occupying most of an archipelago in the central Pacific Ocean, southwest of the continental United States, southeast of Japan, and northeast of...
, Maryland
Maryland
Maryland is a U.S. state located in the Mid Atlantic region of the United States, bordering Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware to its east...
, Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
, Oregon
Oregon
Oregon is a state in the Pacific Northwest region of the United States. It is located on the Pacific coast, with Washington to the north, California to the south, Nevada on the southeast and Idaho to the east. The Columbia and Snake rivers delineate much of Oregon's northern and eastern...
, Pennsylvania
Pennsylvania
The Commonwealth of Pennsylvania is a U.S. state that is located in the Northeastern and Mid-Atlantic regions of the United States. The state borders Delaware and Maryland to the south, West Virginia to the southwest, Ohio to the west, New York and Ontario, Canada, to the north, and New Jersey to...
and West Virginia
West Virginia
West Virginia is a state in the Appalachian and Southeastern regions of the United States, bordered by Virginia to the southeast, Kentucky to the southwest, Ohio to the northwest, Pennsylvania to the northeast and Maryland to the east...
. Zurich is also required to pay about $122 million in refunds to commercial policyholders in a New Jersey class action lawsuit settlement.
Zurich Financial Services settled a bid-rigging and improper "finite reinsurance" transactions probe. Zurich Financial agreed to pay $153 million in restitution and penalties and agreed to a series of reforms. Zurich apologized and acknowledged that "certain of its employees violated both acceptable business practices and Zurich's own standards of conduct by engaging in improper bidding practices and the ‘finite reinsurance’ transactions described in the Assurance of Discontinuance." The states included in the settlement were New York, Connecticut and Illinois.
In May 2007, Zurich Capital Markets, a subsidiary of Zurich Financial Services, paid $16.8 million to settle with the United States Securities and Exchange Commission
United States Securities and Exchange Commission
The U.S. Securities and Exchange Commission is a federal agency which holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets in the United States...
for helping four hedge funds disguise their identities to avoid detection when making frequent trades in mutual fund
Mutual fund
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...
shares. An SEC director stated, “By knowingly financing their hedge funds clients' deceptive market timing
Market timing
Market timing is the strategy of making buy or sell decisions of financial assets by attempting to predict future market price movements. The prediction may be based on an outlook of market or economic conditions resulting from technical or fundamental analysis...
, ZCM reaped substantial fees at the expense of long-term mutual-fund shareholders"
On May 5, 2008 Zurich announced a further 900 job losses in the general insurance sector of their UK operation.