Mario Greco

A New Broom at Zurich Insurance

A pedestrian walks past Zurich Insurance Group AG's headquarters in Zurich, Switzerland, on Monday, Sept. 16, 2013. Zurich Insurance named Tom de Swaan chairman, replacing Josef Ackermann, who stepped down after the suicide of Chief Financial Officer Pierre Wauthier. Photographer: Gianluca Colla/Bloomberg
Zurich Insurance Group's headquarters in Zurich, Switzerland.
  • Why it matters

    Why it matters

    As the new chief executive of the Zurich Insurance Group, Mario Greco plans to put the ailing company back on track for growth.

  • Facts


    • Mr. Greco plans to combine Zurich’s indemnity and life insurance units.
    • A cost-cutting program begun in February is expected to save the company more than $1 billion but will also cost 8,000 jobs.
    • Zurich paid more in claims than it collected in premiums last year.
  • Audio


  • Pdf


This is what investors want to hear: combining business units, streamlining leadership structures and, most of all, saving costs. Mario Greco, the new head of the Zurich Insurance Group, announced last Friday that he intends to fundamentally rebuild the company and thus make it more profitable.

The Italian chief executive, hired in March, is taking a step that his counterparts in the industry will likely view with suspicion. Mr. Greco wants to combine the indemnity and life insurance businesses. On the one side are products like liability insurance, in which damage is acutely assessed and funds must be disbursed at irregular intervals. On the other are policies such as fund-linked pension insurance, which are geared toward decades of savings and disbursements over similarly lengthy time periods.

In key markets like Switzerland, Germany and Italy, Zurich has already initiated the process of combining its life and indemnity insurance businesses. In Germany, the cost-cutting program is expected to lead to the loss of 825 full-time jobs.

Zurich lured Greco away from rival Generali to put the company back on a growth course.

It is clear that something has to change at Zurich. The fifth-largest European insurance group has recently been plagued by high claims payments, inherited liabilities and restructuring costs. The company had already launched a cost-cutting program in February to address these problems. As part of the program, Zurich aims to save more than $1 billion (€890 million) and eliminate 8,000 of a total of about 55,000 jobs by the end of the 2018.

Numbers are one thing, while corporate culture is another. “The Zurich,” as the company is known in Switzerland, was long seen as a conservative and downright boring company that seemed to run on its own steam. But it wasn’t breaking any records either under Martin Senn, Mr. Greco’s predecessor. In the financial markets, the company was considered one of the safest bets for investors, and yet it was seething on the inside.

The supervisory board has long called from better performance in the core business, along with growth and innovation. In a global comparison, Zurich doesn’t exactly shine. Last year, the company paid more in claims than it collected in premiums. That relationship was reversed at German insurance giant Allianz, for example.

Economic conditions are the second problem. If expenditures exceed revenues, an insurer can normally make up the difference with financial investments earning a high rate of interest. But this is difficult in a low interest-rate environment. Observers say that strong dividends were the only reason for investors to remain on board at Zurich. But the share price has now been stagnating at slightly above book value for some time.


Mario Greco, chief executive officer of Assicurazioni Generali SpA, gestures during a Bloomberg Television interview in London, U.K., on Monday, Jan. 14, 2013. Assicurazioni Generali SpA, Europe's third-largest insurer, plans to cut costs and boost cash flow to more than 2 billion euros ($2.7 billion) by 2015 as it focuses on emerging markets and insurance to restore profitability. Photographer: Simon Dawson/Bloomberg *** Local Caption *** Mario Greco
Can Mario Greco turn things around? Source: Bloomberg


Josef Ackermann once tried to inject some spark into the company. The former chief executive of Deutsche Bank was chairman of the Zurich Insurance Group until 2013. “Performance out of passion” was the motto he aimed to introduce at Zurich, but it didn’t sit well with the company’s thousands of employees.

Pierre Wauthier was also unable to cope with Mr. Ackermann’s approach. The company’s former chief financial officer committed suicide in the fall of 2013. In a suicide note, he indirectly blamed Mr. Ackermann for having created an unbearable environment at the company and thereby driving him to commit suicide. An investigation by the Swiss Financial Market Supervisory Authority later concluded that Mr. Ackermann was not responsible for Mr. Wauthier’s death. Nevertheless, he resigned and his deputy, Tom De Swaan, assumed his position.

But the situation did not improve, and the company produced poor results for several quarters in a row. A planned takeover of British insurer RSA failed, and the chief executive, Mr. Senn, was blamed internally and forced out last December. Half a year later, in May 2016, Mr. Senn also committed suicide.

Now Mr. Greco is expected to straighten things out. Zurich lured him away from rival Generali to put the company back on a growth course. Analysts believe that sales could even decline this year, and profitability is already below average for the industry.

At Generali, where Mr. Greco previously served as CEO, he managed to garner respect with uncomfortable business decisions. With his new employer, the buoyant Italian would also be well advised to tackle the Swiss company’s corporate culture.


13 p36 Zurich Insurance Group-01


Ozan Demircan covers the insurance industry for Handelsblatt. To contact him:

We hope you enjoyed this article

Make sure to sign up for our free newsletters too!