Zurich France: driving change in insurance risk resilience

In 2022, Zurich Insurance Group announced a business operating profit of US$6.5bn, a target above the expectations of previous years. The success has been evenly distributed across the group, but the P&C line – which is the main line for Zurich France – has performed particularly well, with a 94.3% combined ratio alongside a rise in business operating profit, too. 

Growth in customers and P&C lines for Zurich France

But the growth hasn’t just been about the numbers and profit. Rather, Zurich France has enjoyed a fruitful 12 months in terms of new customer onboarding, and the development of fresh products and solutions. 

One particular unit that has grown the most over recent years is Zurich Resilience Solutions, or ZRS, created to address the rapidly changing risk landscape with a holistic approach to supporting risk management and helping build resilience.  

It is this area of risk and resilience that has preoccupied the strategies taken by Zurich France over the past few years. Describing the journey taken, Denis Stasinski, Chief Underwriting Officer, explains that there are two clearly defined periods that mark eras of change within Zurich France: “As a starting point, we have the world before and after COVID-19. The global economy has experienced an accelerating transformation – and this is true across geopolitical, societal, economic, and digital spheres. 

“Additionally, we are starting to see the impact of climate change in both the frequency and intensity (or severity) of CAT events. To date, global warming is obviously a concern that we have to address collectively. As an insurance company, we need to analyse and adapt our approach considering those evolutions, which impact the risk landscape we have to deal with.”

Denis Stasinski says that by focusing on digital transformation and the latest technologies, Zurich – which is a global company serving 210 countries and territories – is having greater success in delivering its solutions as well as monitoring risk and resilience. 

Forging solid partnerships has been a fundamental part of Zurich’s success in its transformation journey. Currently partnered with Roboyo, a collaboration of primary importance, Mathieu Pauwels, COO of Zurich France, says that Roboyo’s position as an industry leader has played a critical role. 

“Roboyo is the leading pure player in the Intelligent Automation industry. It has been growing very fast over the last three to four years. Roboyo has helped Zurich Group to build and scale the Robotic practice in 2018 and 2019. Since then, Roboyo has been one of the preferred partners for all the topics around automation.” 

He explains: “They are now helping Zurich France to bring automation to our business. Their key value for us is to be a real pure player in intelligent automation (across industries and technology-agnostic) to offer a very flexible approach (tailored to our size and our business), with deep expertise and the aim to coach, train, and support our business in the automation journey.”

Building a digital future

The insurance industry in general has been slow to adopt the latest innovations and technologies. But Pauwels explains that the pandemic forced a situation that has driven change across the board. 

“Within the last few years, the COVID-19 crisis has impacted ways of working and has had an impact on everyone. During and following the crisis, technology adoption has increased at a faster pace. And that's why I call it ‘digital acceleration’ rather than ‘digital transformation’. Digital has always been there, it is just a matter of accelerating its utilisation and adoption. Now, employees expect a different way of working, in terms of tools and interactions with different people.”

Pauwels points out that hybrid working practices and staff working virtually has driven forward connectivity innovations – not just internally, but also externally with Zurich Insurance, its MyZurich platform having anticipated these needs from customers.  

“They expect different types of services, and they expect to have them remotely. We're offering different services, such as the MyZurich platform, which is a platform for our brokers and customers. That platform also offers a risk advisor tool, for example. 

“We are commercial insurance so it's never the same as retail insurance in terms of digitalisation. Nevertheless, we do have digital solutions that we need to offer (especially for basic activities like insurance certificates) as there is a need for that on the market.”

One of the challenges in implementing these digital solutions comes from issues surrounding data. In hyper digitalisation, where everything goes into the cloud, concerns regarding regulations and governance are often raised, Pauwels says. 

“Questions you have to address about data include: how do you govern the data? How do you make sure that you control what is on the cloud? Where is the data going? Is there any leakage? How do you protect your customer? How do you protect the data of your employee? Ultimately, it revolves around governance.”

Other issues are raised as well, according to Pauwels – especially from a sustainability standpoint. “Digital transformation has a financial cost. But it also has a sustainability cost, because you consume more servers. It's a different cost to paper, and you’re not cutting down trees, but there’s still that energy usage question.” 

Zurich Group and Zurich France are putting in place regulations to control and monitor this, as well as strong governance to make sure they have control over the data. “You have control regarding what you put on the cloud, but the growth has been exponential for the last few years. It’s certainly an area to monitor closely.”

Digital transformation and company culture

The nature of hybrid working patterns has also changed the way teams operate and communicate with each other. Company culture has been disrupted, and taking this into consideration while transforming digitally, is a critical part of the transitional process. Céline Garnier, Head of UW Casualty and Motor for Zurich in France, says creating a sense of belonging and a cohesive team requires strategy. “Challenges post-COVID raised questions about how we needed to keep our employee engagement high. 

“Zurich France wasn’t the only company facing this, but the way that we decided to tackle it was by putting in place a key initiative called People Engagement. We thought about ways to maintain the relationship between employees, between each other. Another aspect of that was how we maintained relationships with our clients and brokers.”

Garnier says that even transitioning colleague relationships from virtual to face-to-face meetings has been considered, with the aim to re-engage people. “Keeping the engagement high is also dealing with the way of working, how we deal with the office space, and the technology that is used. The way we work now is mainly hybrid. It's a great balance between working from home or always working from the office. So this is really a critical way of keeping the engagement high from our perspective.”

Zurich 2023 Global Risk Report

While climate events have played a part in insurers globally adjusting their risk assessments, the latest Zurich Global Risk Report has pinpointed a panoramic view of the problems facing society at this current time. Despite rapid innovations in technology, there are more traditional risks of inflation, cost of living, social unrest, and geopolitical confrontations that must be considered. 

Vinicio Cellerini, Head of CI Customer & Distribution of Zurich Insurance Group, also assuming the interim operational management of Zurich France, says the findings of the Global Risk Report show that companies and entities must work together to overcome these problems. 

“In 2023, we've faced risks that are at the same time both new and familiar. We’re experiencing a return of older risk, such as inflation, the cost of living crisis, and widespread social unrest and geopolitical confrontation. But also, at the same time, there is the threat of nuclear warfare. The most critical long-term risk, though, is climate change, according to the report this year. 

“If we want to dig a bit deeper into the report, then you will see that the cost-of-living crisis is clearly ranked as the most severe global risk over the next two years, though it's also seen as the short-term threat.”

Cooperation and partnerships to combat biodiversity loss and ecosystem collapse is, espouses Cellerini, essential, because it’s viewed as one of the fastest accelerating global risks over the next decade. 

“Clearly, failure of climate mitigation and climate adaptation are the largest long-term concerns. Regarding geopolitical rivalries and new world looking stances, we can expect that they will heighten economic constraints and further exacerbate both short and long-term risks. The Global Risks Report urges countries to work together to avoid resource rivalries. This is what was really important to us regarding global risk this year.”

Market recommendations to encourage change

Zurich’s goal to contribute to a global movement that is centred around sustainability has led the group to partner with a range of marketplace players. Stasinski says: “Our main clients remain large international companies. But we have developed capability and expertise, in terms of risk assessment, and are ready to propose solutions for the middle market. 

“In France, for example, we started to develop an MGA proposition four years ago with a partner named Etik and Tetris, dedicated to the construction sector. To date, it has been a successful development and, obviously, it is a global initiative. We analyse this type of opportunity on a case-by-case basis.” 

As part of this initiative to drive change and better sustainable practices on a global scale, Zurich Insurance has also partnered with the World Economic Forum to increase the scope of its holistic strategy. 

“Risk is clearly our business at Zurich,” says Cellerini. “To understand it, we look at current trends and how they have developed over time. We analyse data, and we partner with prominent experts, drawing on the experience of more than 800 risk engineers across the world. 

He continues: “Zurich champions a holistic approach to risk management by helping businesses understand the triggers and the trends to look out for alongside how to prepare for possible consequences. By helping people understand how global risk interrelates, we give customers and communities the opportunity to plan ahead with confidence and work towards a brighter future. We do this because that's who we are, and that's why we strategically decided to partner with the World Economic Forum.”

Technology and innovation driving change

Martin de Laubadère, Head of Underwriting for Specialty Lines at Zurich France, says technology has been key in facilitating a more sustainable approach to products and services, as well as the way the group operates. 

“The integration of new technology is key for us within the client experience as we see it; it's true for Zurich France, it's true for the group. The main objective behind this is to propose simple solutions, for us to be more intuitive for our clients and the corporations. Individuals working for these corporations will benefit from these services.” 

He says the importance of new technology has clearly grown over the last years, with it seen as a competitive advantage that Zurich Group is happy to heavily invest in. The use of data is critical, but so is the company’s approach to it and the digital platforms that process said data. 

“At Zurich, we don’t limit our relationship with our clients to their difficult times, when a claim or a need for reimbursement happens; it goes way beyond that, as we see the relations with clients as broader and consequently being alongside our clients, to accompany them much more in advance and manage not only the prevention of risks, but also the identification of impacting, meaningful trends.”

The core goal is to be as transparent as possible so that facts and data on risk and resilience can be shared as part of the holistic strategy. “In France, this aspect of digitalisation is one of the three big pillars of our strategy for 2023-2025. The objective we want to achieve is to have a direct impact on our clients, bringing more services. 

“Our A&H line of business provides the capacity to propose online certificates for clients for direct access. I also want to emphasise the importance of international programmes for our clients: we invest a lot in these aspects to ensure programmes can be delivered very efficiently and smoothly for the client.”

Future trends in the insurance market

The next few months for the global insurance industry will see a number of shifts and trends – one of which is an overall increase in the number of claims being made. 

Céline Garnier says Zurich France has had dialogue with reinsurers regarding auto-liability trends from a claims’ perspective: “What we've seen is that amount doubled year-on-year from 2019 to 2021 to reach more than €200mn indemnity for one loss. Risk management is absolutely critical in managing this trend, but discussions about the ways contracts are structured and how the insured are made aware of the exposition and tools that we have in the insurance industry are also essential.”

She continues, underlining that the Global Risks Report outlines the environmental risks that are seen in the short-term and long-term as one of the most important issues by leaders in general. “This obviously has an impact in terms of responsibility, and from a political responsibility, we see a clear switch in corporate responsibility, and behind that that's obviously the directors and officers.”

Martin de Laubadère adds that, from a D&O risk perspective, the evolution of the regulation will have a big influence on the global insurance industry in 2023. “We at Zurich clearly have a lot of D&O expertise and leadership. The intention of the group, globally – but our intention, also, in France – is to maintain our presence to accompany our clients, bring our expertise, and share that with them, working together to face this risk and be more resilient as the future unfolds.”

“Other challenges will be the CAT evolution due to climate change and the necessity to adapt our insurance proposition with this evolution,” adds Denis Stasinski. “Risk assessment is and will remain key to properly understanding the impacts to help our customers adapt their business model.”