Zurich Financial Services is planning a new model for its life insurance business in Switzerland. The objective, the firm says, is to offer its customers services in all segments of insurance from a cost-effective and efficient organization under one single brand.
To this end, the business of Genevoise Compagnie d’Assurances sur la Vie is set to be merged with that of the Zurich Life Insurance Company. Market launch of the new entity is planned for the second half of this year. It is subject to employee consultation and regulatory approval.
Lukas Weber, chairman of the Genevoise board of directors and chief executive officer of life insurance at Zurich Switzerland, says: The planned merger represents a unique opportunity to put what has been achieved on an even more solid footing.
The new model for Zurich’s life insurance business in Switzerland envisages in particular the consolidation of IT platforms and administrative segments. In the medium-term, a new service center will be created in Geneva for customers in French-speaking Switzerland. The integration of the two units will aim to create a concentration of market forces as well as an expansion in the pension business. Meanwhile, the company believes strong market orientation and continued cost discipline will lay the foundation for profitable growth.
After implementation, Zurich expects a sustained earnings improvement of CHF40 million annually. This improvement has to be considered in the light of restructuring costs of CHF50 million. Zurich assumes that the restructuring will lead to a reduction of 150 positions over a period of five years. It hopes to facilitate eventual lay-offs in the context of natural fluctuations.