EMCC European Monitoring Centre on Change

Zurich

Company/Organisation:
Zurich

Geographic Location

Country: Germany

Company

Sector: Financial services
Financial and insurance activities
65.1 - Insurance
Number Employed: 5200

Employment Effects

Announcement Date: 23-09-2015
Planned Job Reductions min: 825
Planned Job Reductions max: 825
Type of Restructuring: Internal restructuring
Employment Effect Start: 23-09-2015
Foreseen End Date: 31-12-2018

Additional Information

Zurich Insurance, the Swiss insurance company, will cut 500 jobs from its German division within two years, which sums up to almost one tenth of the whole workforce. The company has introduced an efficiency and investment programme in order to reduce costs, however the company wants to avoid compulsory redundancies. The stated reason for the need to cut costs is the pressure from German customers to reduce prices combined with the impact of low interest rates. Furthermore the company hopes to reduce its expenses ratio to under 25% through a mixture of cost reduction measures and simplification of the company's operations.

International operations are also causing problems for the company, as in the third quarter its performance in the US was burdened with €270 million, due to high claims in the automobile insurance segment and other third party liability related services. An explosion in the Chinese port of Tianjin resulted in another payment of €247 million. In light of recent events the planned acquisition of its competitor RSA has been cancelled.

Update 28/04/2016: At the annual press conference in Bonn,the company's chairman presented the new strategy programme “z e1ns”. The company wants to reduce complexity and its cost base and simultaneously enhance efficiency and profitability. Therefore and in the course of digitisation, 825 jobs will be cut by the end of 2018. This number exceeds the 500 redundancies announced in September 2015. According to the company, certain jobs will become no longer necessary as processes will be automated and digitised. This affects the whole insurance sector as well as other branches. Moreover, Zurich will reduce the number of administration sites. The current five sites will be merged into two sites, prospectively located in Cologne and Frankfurt. The company's pre-tax results decreased by €71 million in 2015 compared to 2014. However, the gross premium income increased by four percent to €6,5 billion.

Zurich Group Germany, headquartered in Frankfurt a.M., currently employs 5,200 employees.