He may get stuck in blizzards from time to time, but Zurich’s chief executive is clear about the recent company restructure. It makes sense and will work extremely well, he tells Ellen Bennett. As will that little shift of capital across the Irish Sea … Photographs by Wilde Fry
When Zurich chief executive Guy Munnoch was delayed in Antarctica because of transport problems on his last holiday, he didn’t need to worry about getting back to the office on time. “I’ve got the best team in general insurance,” he says. “And great teams just don’t miss a beat.”
Munnoch is known for his love of endurance sports – he’s been to both Poles, run marathons across the Sahara, you name it. In his spare time, he runs Zurich, the UK’s largest commercial insurer, and the fastest growing last year. The sport must make a welcome change because, at the office, it’s all about consistency. Having got rid of 870 staff – that’s one in five – last year, Zurich is now focused on delivering this continuity.
Its 2008 results were solid, given the economic backdrop with the company reporting an operating profit of £295m and a GWP of £2.097bn, an increase of 2% on the previous year.
But Zurich is a large international group and, given its recent decision to domicile the UK operation in the Republic of Ireland, there have been some questions about its commitment to the UK. Moreover, with the appointment by Zurich’s Europe General Insurance chief executive Annette Court of a chief executive of Western Europe, Marcus Hongler, at the end of last year, and a subsequent restructure of the Zurich top brass, Munnoch’s seat is looking a little less comfortable than when he first took it.
“He’s a lovely guy,” says one insurer who knows him well. “But I think his role is changing. He’ll work a couple more years at Zurich, then he’ll retire.”
Maybe so, but you wouldn’t think it to look at him. All that exercise has kept him in good shape and he looks a good ten years younger than he is. Dapper and smiling in his office in the London Underwriting Centre, Munnoch gives a friendly welcome to Insurance Times .
Does he plan to retire soon? “I’m still enjoying what I’m doing,” he smiles diplomatically, which, it soon becomes clear, is characteristic. “I’ve built up a fantastic team, and I’ve taken great delight in bringing them on.”
He is equally positive about the management restructure, which sees him and the other seven European chief executives report to Hongler, who in turn reports to Court. “It works extremely well, and in a far more focused way, with complete clarity around all the dynamics one would normally have with seven fellow CEOs.”
Munnoch lost responsibility in the restructure for direct and partnership business in the UK – it has been rolled into a Europe-wide division – but he remains sanguine. “It was a small thing, about 15% of my income,” he says. “The change allows me to focus on the broking side.”
Munnoch, a former military man, has been in post for two-and-a-half years, and has been with Zurich since 1997, first in engineering and claims services and then heading up claims. His career in insurance began at Norwich Union, now Aviva, working with former chief executive Patrick Snowball.
He deflects questions about the move to Ireland, although you can sense some frustration when he complains: “There is no move! People talk about the move to Dublin, but nothing has moved. I’ve been there once and there are only eight people there. It’s a move of capital, and it makes a lot of sense.”
The insurer remains “absolutely committed” to the UK he insists, pointing out that it accounts for 15% of the group’s overall income.
So what are its plans? No new product launches are on the horizon, although it has just moved into the charity sector. Instead the focus is on growing the business in the lines where Zurich already operates.
Munnoch is particularly keen to build up the SME sector, which Zurich moved into last year – he says he’s aiming to become a top three player in the segment.
“Our strategy has been in place for some time,” he says. “It’s very much about being a multi-segment insurer. That approach has allowed us to ride out the storm. I feel that we are more sure-footed than others, because we weren’t launching a new strategy at the time of the economic environment changing.”
There’s a message of consistency for brokers, too. A couple of years ago, Zurich divided its brokers into four, ranging from the select 30 at the top to those in the bottom layer which it would rarely work with. It offers remuneration, access to products and service accordingly, in what has now become a common approach across the market.
On some of the more controversial questions of the moment, such as broker commission, MGAs and networks, Munnoch remains neutral.
Zurich is known as a low commission payer, and intends to keep it that way. It did pull out of network Westinsure at the back end of last year, but that was an isolated incident. And he has no problems with MGAs being, for example, a carrier for Willis. “The distribution landscape has changed massively in the past 18 months – and we have moved with it,” he says. “We have not closed down any area.”
Meanwhile, that legendary falling-out with Towergate a few years back is the stuff of history now, and Munnoch talks of good relationships with the other consolidators. As for Towergate, you get the sense they probably don’t work together that much – but he insists they will where it is appropriate. “It’s a nice grown-up way of operating,” he says.
Given its size, Zurich keeps a pretty low profile in the UK market, although it does take a strong line on a number of claims-related issues. For example, it has a leading role in the fight to stop pleural plaques becoming compensatable in Scotland, and Munnoch feels that this is not always recognised.
The market’s perception of Zurich is pretty low-key. Perhaps that’s always the way with UK branches of foreign insurers, where they can’t say too much without getting on the phone to head office – although AXA seems to manage OK. Or perhaps it simply doesn’t have that much new to say: it’s just getting on with the job in hand. Certainly, Munnoch is well liked and if the day job ever gets a little dull, no doubt there’s a sub-Saharan desert to be conquered.