Swiss insurer Zurich has begun a phased closing to new retail and small business customers in its general insurance business in the Middle East since 30 November. It will continue to provide life insurance services.
Subject to an assessment of contractual obligations, existing portfolios in this business will be put into run off. This means that Zurich will effectively exit its general insurance businesses in the Middle East by the end of 2016 or as soon as possible thereafter.
Zurich’s global corporate business will continue to underwrite new policies under the DIFC reinsurance licence and will stop underwriting new policies under the onshore licence through branches in the UAE, Oman, Kuwait, Qatar, Bahrain and Lebanon.
The decision follows a comprehensive review of the general insurance business in line with the group’s strategy to focus on its core business by prioritising investment in markets where it sees the best potential for growth, managing other markets for value, and turning around or exiting underperforming markets.
The review found that while the Middle East remains an attractive market, there was limited potential for the general insurance business of Zurich to profitably grow its business in the region and achieve an operating scale that warranted the continuing investment of capital and management resources.
Zurich will continue to service its existing policies in the general insurance business for the remainder of their duration, as well as ongoing claims management and the fulfilment of its obligations to customers. These changes mean that a number of jobs will change or cease to exist, though it is unclear at this stage how many roles will be affected.
“This has been a difficult decision for Zurich, reflecting the challenges of building a strong and profitable franchise across multiple markets in the region in the current economic environment,” said Mr Brian Reilly, CEO of Zurich’s general insurance business in the Middle East. “Zurich deeply regrets the impact on our employees and the inconvenience to our general insurance customers and partners across the region.”
Zurich said that it remains firmly committed to the insurance market in the Middle East through its life business, playing a market-leading position in the savings and investments as well as the protection space, and continues to invest in the business.
“Retail and corporate customers and distributors of Zurich’s life business will continue to receive the same quality of service and product choice that they have received in the past,” added Mr Jawed Barna, CEO of Zurich’s life insurance business. “The Middle East will remain one of the key markets for Zurich’s Global Life offering.”
Zurich reported a global business operating profit of US$2.5 billion and shareholders’ equity of $31.6 billion for the nine months ended 30 September 2015.