Zurich cautious over financial lines and motor risks
Rate increases to continue but at slower pace: Signorelli
Zurich is being cautious and keeping a “close eye” on financial lines business given the current soft market, with particular focus on terms and conditions.
The company is also watching the motor market and has pulled back from nat cat. But risk managers will be pleased to hear that the insurer sees growth opportunities in several other lines, and is particularly keen to push further into the construction space.
Sierra Signorelli, CEO of commercial insurance at Zurich, told a press conference this week that double-digit rate increases for the last four years have helped Zurich return its commercial business to profit and improved the combined ratio. She believes that rate increases will continue next year but at a slower pace.
Signorelli explained that Zurich is taking a “cautious stance on motor, particularly in the US, which is challenged, as well as keeping a close eye on financial lines, given the rate environment we currently see”.
The D&O market has swung from very hard market to soft, with several insurers claiming rates are getting too low given the risk outlook.
Zurich CUO Penny Seach said D&O rates are “stabilising” in some areas but it depends on the attachment point and amount of capacity being deployed. And while Zurich is clearly wary of the D&O rating environment, Seach said a big focus is terms and conditions.
“That to us is far more important in terms of what will hold up over time and making sure there is strong language coverage that guarantees certainty. We are seeing discipline in that space and we continue to expect to see that continue with regards to terms and conditions,” said the CUO.
Signorelli added that Zurich has carefully managed its exposure to weather-related events given loss trends. But she said that Zurich remains the second-largest property insurer globally and is looking to back customers when it feels comfortable.
“It is not that we are shying away from supporting customers from a property perspective or with coverage for natural catastrophes, but we have managed [the business] through looking at peak perils and our exposure to them, diversification and helping our customers to manage their exposures,” said Zurich’s commercial CEO.
Signorelli said aside from these three areas, Zurich believes most lines of business currently look appealing and sees “tremendous growth” opportunities in the construction market.
