Up to 1,800 Jobs May be Affected in Zurich Insurance Streamlining
December 5, 2015 by David Pilla, news editor, BestWeek: David.Pilla@ambest.com
ZURICH – About 1,800 jobs may be affected as Zurich Insurance Co. Inc. outlines a global streamlining program that will include outright cuts estimated at about 1,100 in several phases through 2018.
The job cuts include about 500 positions to be cut at Zurich Germany, announced in September, said Zurich spokesman Frank Keidel. He told Best’s News Service those cuts will be completed by the end of 2018.
For Zurich UK, Keidel said a cost-cutting program unveiled in November includes eliminating about 440 positions by the end of 2017.
In the general insurance segment, about 200 positions will be cut in Switzerland, the United Kingdom, Ireland and the United States by the end of 2015, he said.
“We don’t provide a further split of the numbers and the locations” involved in the cuts, Keidel added.
In addition to the job cuts, Keidel said the group operations and technology division will see that by the end of 2017, about 300 jobs currently based in Switzerland will be moved to already-existing shared services centers “abroad,” or outside Switzerland.
About 360 positions will be affected globally through redundancies, eliminating open positions and relocating to other countries by the end of 2017, Keidel added. Those positions are in global corporate, which serves multinational customers, he said.
“We recently confirmed in the U.S. that we have announced internally a reduction in force across global corporate in North America to adjust our staffing resources in alignment with our business needs,” Keidel said of the U.S. portion of the global corporate restructuring. “Regarding the number of employees impacted, it is fewer than 100 out of 9,500 employees in North America.”
Keidel added Zurich said in its May Investor Day conference it is targeting group-wide annual cost savings of US$300 million by the end of 2016 and more than US$1 billion by the end of 2018.
The group had said earlier that as a result of a review of its nonlife business, it would cut up to 440 jobs in its nonlife operations in the United Kingdom and begin a “phased closing” of nonlife retail and small business coverage in the Middle East.
Zurich, which recently failed to acquire rival RSA Insurance Group and also encountered problems in both China and North America, recently said Martin Senn, its chief executive officer, will step down at the end of the year (Best’s News Service, Dec. 1, 2015). Zurich said Senn will be replaced on an interim basis, “with immediate effect,” by Tom de Swaan, the group’s chairman. The group said it has begun the process of seeking a permanent successor for Senn.
Zurich said Senn’s exit was “by mutual agreement with the board of directors.” Senn, who has been Zurich’s CEO for six years, has been with the group for a decade. Before becoming chief executive, he was chief investment officer.
In September, Zurich announced it would not proceed with the acquisition of RSA, citing the “deterioration in the trading performance” of its nonlife business. That deal had been valued at £5.6 billion (US$8.85 billion). Instead, Zurich said, it would concentrate “on taking the necessary actions to deliver on the required performance of the general [nonlife] insurance business.”.
In November, Zurich cited problems in North America and its US$275 million in losses from the series of explosions that hit the Chinese port city of Tianjin in mid-August, in reporting a 79% drop in third-quarter business operating profit to US$207 million.
Zurich Insurance Co. Ltd. currently has a Best’s Financial Strength Rating of A+ (Superior).
