Zurich Insurance Group AG’s German unit, which sells auto insurance with the country’s ADAC automobile club, plans to offer a wider range of policies after reducing coverage following a surprise write-off last year.
“Our mid-term goal is to reduce dependency on car insurance,” Ralph Brand, head of the Swiss insurer’s German unit, which accounts for about 10 percent of its premiums, told reporters in Cologne, Germany, on Dec. 4. “We need to become more profitable and to switch gear from keeping our market position to growth.”
The German unit, based in Bonn, had premiums of 6.1 billion euros ($8.3 billion) in 2012, and stopped selling life insurance with guaranteed returns this year to focus on less capital-intensive products. Switzerland’s biggest insurer increased provisions at its German general insurance business by about $550 million in October 2012, and in February said it had set aside a further $130 million for 2012 to cover potential claims losses at the division.
“The reserving issue is over,” Brand said. “We have learned from that and taken the necessary precautions to make sure this won’t happen again.”
Zurich yesterday lowered its profit goal as Chief Executive Officer Martin Senn signaled he’s ready to sell some businesses to bolster earnings growth.
“We are very strong in some areas but we lack scale or profitability in others,” Senn said. “We will invest in priority markets but manage other businesses for value. This will mean improving the profitability of certain businesses, while we will either turn around or exit those that are under-performing.”