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Zurich Insurance Group, Ltd is an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets.

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Property Risk Insights Strengthen Resilience After Loss

Risk engineers help customers harden their assets against a variety of perils.
By: | November 2, 2016 • 5 min read
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Commercial property owners need to protect their assets, and a focus on resilience is an important way to mitigate property risks, advises Richard Montminy, head of property for Global Corporate, Zurich North America.

In this Perspectives presented by Zurich, he discusses marketplace trends and shares insights on property risk management.

What trends is Zurich seeing in 2016 in the property insurance marketplace?

The market is seeing an abundance of capacity, driven in part by the entry of new and alternative players in commercial insurance. These include non-traditional insurers, start-ups and investors seeking new opportunities. At the same time, we are continuing to see downward pressure on property rates. In the past, we used to describe the market cycles as “soft” or “hard,” but these aren’t really coming into play anymore; it’s just the market. The marked reduction in insured catastrophe losses has also been pressuring both insurance and reinsurance rates downward.

Zurich_SponsoredContent“Our risk engineers are
equipped to help customers
harden their assets against a
variety of perils.”

– Richard Montminy, head of property, Global Corporate, Zurich North America

At the same time there has been a continued flow of attritional and large losses hitting the market, including most recently the Fort McMurray wildfires in western Canada. Even though these losses appear to be putting a slight damper on rate declines, the overabundance of capacity continues to drive the market that we have been experiencing in 2015 and into 2016. The challenge that insurers will face as we look forward is that the continued drawn-out downward pressure on rates across the property industry is creating an unhealthy market that is not sustainable over the long run.

How can commercial property insurers deliver value to retain profitable business in an environment of declining rates? How can you truly differentiate?

In a market where rates are declining, it can be tempting to seek the lowest price for coverage. But there are significant differences among insurance providers. At Zurich, we differentiate our value through our ability to give our customers insights to improve the resilience of their organizations. We’re constantly working with customers to build that into the infrastructure of their organizations so that they can regain their footing quickly after a loss. Zurich has more than 100 years of experience in delivering on our promises to customers in North America, and as a leading global insurance group we can help property owners manage their risks in more than 200 countries and territories. Risk insight, claims expertise, global reach, financial strength — these are just a few of the reasons why multinational corporations have chosen Zurich as their risk partner for many years. We provide value not just in the insurance policies we offer but also through the insights we deliver.

How does Zurich help property customers build resilience?

Our risk engineers are equipped to help customers harden their assets against a variety of perils. Zurich risk engineers work closely with customers to build business continuity plans, and to take steps before, during and after a loss. We bring not just a catastrophic perspective or a fire perspective but broad-based experience in mitigating a broad spectrum of risks. Our teams gain insights from working with customers in all industries, and we are able to share insights to help reduce property risks. For example, a company in the plastics industry acquired a peer with manufacturing processes somewhat different from our customer’s operations. Zurich had experience with a loss on similar exposures faced by another customer, and our engineer was able to share these insights. We showed the companies where they could build protection into their processes. In another instance, we engaged with a large hospitality company to show them how to build in protection to prevent water intrusion, which causes most of the damage in hurricanes. From securing rooftop equipment with cables to sloping balconies to encourage drainage to the proper glazing and support structure of windows to resist projectiles and breakage, Zurich helped this customer enhance its resilience. We have shown our customers that it’s possible to retrofit buildings but generally much cheaper to incorporate the proper design up-front. Many of our large customers have used our insights to implement changes in the design phase.

How important is it for insurers to make investments that help customers build resilience?

We want our customers to expect full engagement and attention from us. Zurich continues to invest heavily in our risk engineering group, to deliver insights and to ensure we’re keeping up with changes in building and industry standards. Our teams have been through catastrophe events many times, and we are able to advise customers on what they need to do in the first hour, the first week and month, etc., when a loss occurs. Zurich’s relationships with vendors enable us to help customers plan for generators and fuel, for example. We are making investments to strengthen our ability to help our customers think about and plan for resilience and recovery.

For more information about Zurich property solutions and risk insights, visit zurichna.com and the Zurich Virtual Literature Rack at zurichvlr.com.

This is intended as a general description of certain types of insurance and services available to qualified customers through the companies of Zurich in North America, provided solely for informational purposes. Nothing herein should be construed as a solicitation, offer, advice, recommendation, or any other service with regard to any type of insurance product underwritten by individual member companies of Zurich in North America, including Zurich American Insurance Company, 1299 Zurich Way, Schaumburg, IL 60196.

Your policy is the contract that specifically and fully describes your coverage, terms and conditions. The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy. Coverages and rates are subject to individual insured meeting our underwriting qualifications and product availability in applicable states. Some coverages may be written on a nonadmitted basis through licensed surplus lines brokers. Zurich does not guarantee any particular outcome and there may be conditions on your premises or within your organization, which may not be apparent to us. You are in the best position to understand your business and your organization and to take steps to minimize risk, and we wish to assist you by providing the information and tools to help you assess your changing risk environment. Risk engineering services are provided by The Zurich Services Corporation.

©2016 Zurich American Insurance Company

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Zurich. The editorial staff of Risk & Insurance had no role in its preparation.




Zurich Insurance Group, Ltd is an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets.
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Working Together to Manage Energy Risks

Having a true risk management collaboration with an insurer will prove increasingly valuable as challenging market conditions persist.
By: | August 31, 2016 • 5 min read

The energy sector is high stakes. For oil and gas, petrochemical and power generation companies, every risk is amplified by the sheer number of people reliant on its services.

“In most industries, if property damage is suffered, finding ways to continue production or sales may be relatively easy, and the effects on customers are minimal. If a power plant goes down however, it could leave millions of people without power. The stakes are much higher,” said Joe Tinetti, head of U.S. energy property and marine, Zurich Global Corporate in North America (GCiNA).

Insurers face their own challenges in this industry — the perfect storm of overcapitalization, an influx of new carriers and pressure to grow portfolios and results at a time of reductions in available premium income.

At the same time, risk managers in the energy sector face pressure from the C-suite to cut expenses as the organization deals with the challenge of falling oil prices.

“This situation creates an imbalance between supply and demand that perpetuates soft market conditions,” Tinetti said.

“The risk management departments at energy companies are already running lean, even at Fortune 100 companies,” said Jeanne Jankowski, head of energy and marine at Zurich GCiNA. “As insurers, we have to listen to what risk managers’ needs are so we can tailor solutions that reduce their total cost of risk.”

Zurich_perspectives_090116“If a power plant goes down however, it could leave millions of people without power. The stakes are much higher.”

– Joe Tinetti, head of U.S. energy property and marine, Zurich Global Corporate in North America

 

Crafting a Collaborative Solution

With such high stakes and challenges on both sides of the risk management equation, energy companies need an insurer with a long history in the business, with the experience and expertise to enable a true partnership.

“While new players enter and exit the market, Zurich has been very consistent,” Jankowski said. “We have had a dedicated energy practice in North America for over 25 years. Since many energy companies have international exposures, we are able to provide access to one of the largest global networks in the insurance industry, reaching more than 200 countries and territories around the world.”

Zurich’s risk engineering and claims teams also come with decades of experience among them.

On average, each of Zurich’s risk engineers brings a minimum of 15 years of industry experience to the table. These engineers, along with underwriters and claims professionals, collaborate with risk managers and brokers to gain an understanding of the specific risks they face and the type of solutions they need.

“Every team member knows the client, because underwriters, risk engineers and claims professionals all have a different perspective of the risk,” Jankowski said. “Working together, they can develop the best solution to help the customer address them cost-effectively. Our underwriters know our customers and our risk engineers understand how to help them identify and mitigate risk. By collaborating on behalf of our clients, we can build holistic solutions that include insurance and other effective risk mitigation strategies.”

Facility maintenance and safety are two top priorities for risk managers in the energy industry, but it can be difficult to prioritize the budget. Should more dollars go to safety training, or to the upkeep of a slightly aging processing plant?

Risk management often has to fight for its share of the budget — a challenge that risk engineers and underwriters can address by developing cost-effective programs and by crafting creative ways to present them to senior management.

“One top concern for risk managers is the price of risk transfer, so we help them develop solutions to mitigate costs while also managing the maintenance and improvement of their facilities,” Tinetti said. “We help them determine where to allocate their resources. When you prioritize maintenance, you mitigate future loss costs.”

Zurich_perspectives_090116“Our underwriters know our customers and our risk engineers understand how to help them identify and mitigate risk. By collaborating on behalf of our clients, we can build holistic solutions that include insurance and other effective risk mitigation strategies.”
– Jeanne Jankowski, head of energy and marine, Zurich Global Corporate in North America

The Importance of Relationships

Zurich reinforces its integrated and holistic approach through its annual stewardship meetings, which bring together insureds, brokers, underwriters, claims managers and risk engineers.

Not only do these meetings offer an opportunity to engage with customers and deepen relationships, they also serve as a “mid-year assessment” to help Zurich ensure that it is delivering on its promises to customers and meeting clients’ needs and expectations.

“If we know our clients better, we can serve them better,” Tinetti said. “This is an extra opportunity for face-to-face discussion, which is so important in building relationships.

“We hear directly from risk managers what their pain points are,” Tinetti said. “This gives us insight on the risks we need to pay attention to, and helps us craft solutions to meet their needs.”

Based on their feedback, and the observations of the claims team, Zurich provides thought leadership and market insights with the goal of anticipating and proactively mitigating emerging risks.

“If our claims professionals identify recurring issues, we can conduct a broader portfolio analysis to identify trends and share these industry insights with our customers,” Jankowski said.

If trends emerge in particular loss types or frequencies, Zurich can respond with specific risk management recommendations, such as maintenance plans or formal safety programs.

Having a true risk management collaboration with an insurer will prove increasingly valuable as challenging market conditions persist and C-suites grow more involved with risk management. In the energy sector, the consequences of failure are often severe and very publicly visible.

“We are dedicated to offering longterm solutions for our clients so they can effectively manage their risks and expenses in the continued soft market,” Jankowski said. “We’re here for the long haul.”

For more information about Zurich energy & marine solutions and services available, visit zurichna.com and the Zurich Virtual Literature Rack, zurichvlr.com.

This is intended as a general description of certain types of insurance and services available to qualified customers through the companies of Zurich in North America, provided solely for informational purposes. Nothing herein should be construed as a solicitation, offer, advice, recommendation, or any other service with regard to any type of insurance product underwritten by individual member companies of Zurich in North America, including Zurich American Insurance Company, 1400 American Lane, Schaumburg, IL 60196.
Your policy is the contract that specifically and fully describes your coverage, terms and conditions.
The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy. Coverages and rates are subject to individual insured meeting our underwriting qualifications and product availability in applicable states. Some coverages may be written on a nonadmitted basis through licensed surplus lines brokers. Zurich does not guarantee any particular outcome and there may be conditions on your premises or within your organization, which may not be apparent to us. You are in the best position to understand your business and your organization and to take steps to minimize risk, and we wish to assist you by providing the information and tools to help you assess your changing risk environment. Risk engineering services are provided by The Zurich Services Corporation.
©2016 Zurich American Insurance Company

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Zurich. The editorial staff of Risk & Insurance had no role in its preparation.




Zurich Insurance Group, Ltd is an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets.
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Services to Support Private Equity

Mergers and acquisitions continue apace, driven by low interest rates. But the risks involved are broad and complex.
By: | May 2, 2016 • 5 min read
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The year 2015 was a record for mergers and acquisitions, driven by an
environment of low interest rates, low organic growth and shareholder pressure for value.

For private equity firms, those conditions presented opportunities for expansion, but also made it more challenging to deliver high returns for investors year after year. A quiet IPO market adds to the pressure, robbing firms of their traditional exit strategy.

“IPOs launched within the past two years have been trading lower than their initial offering price,” said Andy Peterson, head of private equity for Zurich Global Corporate in North America.

“Scale does matter, and it’s been increasingly hard to go it alone. Mergers and acquisitions are ways to help spur growth.”

Activity in the private equity field remains high, and increased fundraising in 2015 means there is cash ready to keep M&A at the forefront of conversations in the deal room in 2016.

The risks involved in bringing two companies together are broad, complex and can diminish the value of any deal without proper mitigation. With far fewer IPOs, private equity firms are holding onto their portfolio companies longer, increasing their exposure.

Zurich_SponsoredContent“The right carrier partner can provide value at every step of the investment cycle — deal generation, due diligence, postacquisition and exit — through a mix of insurance products and enterprise risk solutions.”
— Andy Peterson, Head of Private Equity for Zurich Global Corporate in North America

Insurance not only protects PE firms from liability shouldered by acquired companies, but also acts as an asset to bring to a negotiation.

The right carrier partner can provide value at every step of the investment cycle — deal generation, due diligence, post-acquisition and exit — through a mix of insurance products and enterprise risk solutions.

“Zurich has the best-in-class capabilities to support our customers’ goals at every phase,” Peterson said.

Enterprise Risk Solutions

Enterprise risk solutions help private equity firms conduct due diligence more thoroughly, and can help them decide whether to continue with a deal or pull the plug.

Many of Zurich’s most valuable risk management insights relevant to private equity decision-makers come together in its proprietary Zurich Risk Room, an online aggregation of data that customers can reference as they research target companies, their industries and the risk exposures they may present at home and abroad. The tool can help customers identify the correlation between various risks and test assumptions before making a strategic decision.

“For example, a private equity customer is considering an acquisition in Germany. They can use tools in the Zurich Risk Room to create a flood map and determine flood exposure at the property. That could either bolster their confidence in the acquisition or convince them not to go through with the deal because the risk is too high,” Peterson said.

Zurich Onsite is another innovative tool that is changing the game for risk engineering solutions provided to many customers. The tool increases the transparency of the whole risk assessment process, and enables customers to obtain better insights from site visits than ever before.

These insights enable more informed conversations with the risk engineer during visits, prompting quicker action on risk improvement actions and helping businesses deliver on their loss prevention strategies.

Sophisticated Structures

Once a deal gets the green light, PE firms familiar with the utilization of captive insurers may be positioned to leverage that experience to manage many and perhaps all of their risk portfolios. Building a self-insured structure for an entire portfolio within a captive can deliver a high degree of flexibility while providing coverage for the risks that a firm could inherit from its assets. In effect, a captive helps minimize risk and maximize financial freedom.

“How we structure a program will differ depending on a client’s unique goals and risk appetite, but captives provide a way to pull an array of risks under one roof,” Peterson said.

International Capabilities

Companies looking to expand globally face additional challenges with local regulatory and compliance requirements. While North America still leads the way in terms of investment and deal generation, Europe is not far behind and Asia is gathering steam. Additionally, emerging markets offer more and more opportunities for companies to establish an international footprint.

“Your insurer has to have the capability to write local policies back to a U.S. master policy, and doing that well is a daunting task,” Peterson said.

He noted that Zurich is one of a few carriers with the international capabilities to support expansion and acquisitions abroad.

The information in this publication was compiled from sources believed to be reliable for informational purposes only. We do not guarantee the accuracy of this information or any results and further assume no liability in connection with this publication. We undertake no obligation to publicly update or revise any of this information. This is intended as a general description of certain types of insurance and services available to qualified customers through the companies of Zurich in North America, provided solely for informational purposes. Nothing herein should be construed as a solicitation, offer, advice, recommendation, or any other service with regard to any type of insurance product underwritten by individual member companies of Zurich in North America, including Zurich American Insurance Company, 1400 American Lane, Schaumburg, IL 60196. The policy is the contract that specifically and fully describes the coverage, terms and conditions. Coverages and rates are subject to individual insured meeting our underwriting qualifications and product availability in applicable states. Some coverages may be written on a nonadmitted basis through licensed surplus lines brokers.

SponsoredContent
BrandStudioLogo

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Zurich. The editorial staff of Risk & Insurance had no role in its preparation.




Zurich Insurance Group, Ltd is an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets.
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