Zurich Reorg Designed to Improve the Customer Experience: CEO Greco
The structural changes announced by Zurich Insurance Group late last week are intended to organize the company “around the customer” and improve customer innovation, according to Chief Executive Officer Mario Greco.
While a simplified structure will create cost benefits, that is not the focus of the organizational changes, emphasized Greco, delivering on a promise to simplify the company’s complex operational structure.
“We are combining…life and nonlife, and moving to a regional structure with the CEOs of each region reporting directly to me,” said Greco, the former CEO of Italy’s Assicurazioni Generali SpA, who took over the helm of Zurich in March.
“Each country will report up to the region. The structure is so simple and will have a clear line of sight to the people looking after our customers,” he explained during a conference call with reporters after last week’s announcement.
Greco said each customer will have “one interface with the firm, engaging with an expert who truly understands their circumstances… can deploy the full range of Zurich products and services” to meet their risk management needs.
Greco said the unification of life and non-life business is primarily happening on the retail side (which includes both personal lines and SMEs), but not for corporate and commercial insurance business.
“Corporate and commercial are sold through different distribution channels and so integrating the offer doesn’t help that much.” However, he indicated that the new organizational structure still matters a lot for corporate and commercial clients because the targets, incentives and Zurich priorities will be unified in every country.
Greco noted that the existing “fragmented structure” didn’t just add to costs, it also complicated relationships with customers, sometimes to the point where different units within Zurich ended up competing against each other.
By breaking silos, underwriters cannot compete internally, he noted. “There is a big market out there and we want to compete in the big market. We don’t want to compete inside the house.”
“Our strong belief is that by simplifying the relationship, by giving customers ownership and clear accountability, our market position could become better…,” he said.
These structural changes give a signal that Zurich is focusing on customer service and customer innovation, he said. “We’re focusing on the markets and we are simplifying and reducing the famously complicated structure of Zurich insurance,” Greco added.
“The new structure will promote innovation and will meet the evolving expectations of customers, employees, and shareholders and the broader society in which Zurich operates.”
The “prospects for the insurance sector are strong in a world of proliferating risks,” he said, noting, however, that Zurich has been challenged to “adapt to remain effective in helping customers manage those risks.”
He acknowledged that the changes will have an impact on the company’s costs, but it is too early to be able to quantify it.
Between July 1 and Sept. 1, Greco said, the organization of Zurich’s countries and regions will be studied. With second-level managers set to be chosen and actively working on their responsibilities by Sept. 1, the impact of organizational changes on costs will be clearer at that time, he said.
Greco promised that full details of Zurich’s future strategic plan will be announced during an Investor Day scheduled for Nov 17, when financial targets, objectives, strategy and market focus will be revealed. Financial targets and strategic objectives “are the things that will shape the future of the company much more than a simplified structure,” he emphasized.
“I hear too often talk of job cuts and layoffs… In reality, this [reorganization] gives us an enormous benefit in terms of unifying required investments,” he said, explaining that in the past there were too many silos and disconnected units in countries and regions, which led Zurich to unnecessarily repeat operational investments.
“I expect significant benefits of this new structure from unified choices on investments to be taken and this is a much bigger number than anything related to labor costs and workforce,” Greco said.
“My focus is to get Zurich back to [being] competitive in the market, to be leading product and services innovation…,” he said, emphasizing that the company is in good shape “and does not require radical change that will transform it or dramatically change the balance sheet or the capital position.”
A version of this article first appeared in Insurance Journal’s sister publication, Carrier Management.
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