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Transcript of North America Risk Management Council Meeting/Webinar February 24, 2009 CONFIDENTIAL.
North America Risk Management Council Meeting/Webinar
February 24, 2009
CONFIDENTIAL
Global Corporate in North America2
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Welcome New MembersDan Baldwin - Leggett & Platt
Paul Prouty - Newmont Mining
Alain Simard - Saputo Inc.
Claudia Temple - Kraft Foods
Steve Allison - The Shaw Group
Stacey Regan - General Electric Company
Chris Gallagher – Procter & Gamble
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AgendaTuesday, February 241:00 pm Welcome Greg Maguire
1:15 pm Zurich & Global Corporate UpdateMario Vitale
2:00 pm Economic Outlook / Q&ADaniel Hofmann
2:35 pm Zurich’s perspective on the financial Mike Kerner
and insurance markets including reinsurances
Zurich review of counter parties for reinsurancebeyond the rating agencies
3:05 pm New Products / SolutionsMike Garceau
3:15 pm Round-table OPEN discussion facilitated by: Paul Horgan
3:55 pm Closing, next steps & next meeting Mario Vitale
4:00 pm Meeting adjourns
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Why a Risk Management Council? Mission
Provide an open forum for discussion and information exchange between Zurich in North America and Risk Managers
Explore current issues and trends affecting the management of risk
Seek collaborative development of contemporary, tangible solutions for Zurich in North America and its customers
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Objectives
Encourage constructive dialog between large corporations and Zurich.Establish two-way communication between Zurich senior management and industry representatives on economic, regulatory and social issues which may affect our industry or our customers' industries.Create an understanding of Zurich and of its customers' product and service needs so as to align our respective operations to meet these needs.Provide Risk Managers an opportunity to exchange information.
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Council structure and terms of service
Risk managers from large domestic and global companies
Three year termsRegular meeting attendance (attend 4 of the 6 meetings)
One third of memberships expire each year One third are new
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Company membership criteria Values long-term relationships Values solid risk engineering and claims services Values direct dialogue with carriers
Views price as one criteria in buying decision, but not sole criteria
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Company membership criteria Values carriers with international capabilities
Risk management is a key function Global company with strong financial rating (BB
or better)
Annual revenues greater than USD 750 million
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Risk manager selection criteria
Proven track record of exploring new, innovative approaches to risk financing and management
Active in the professional community via RIMS or other professional groups
Position of authority within firm and some autonomy in decision-making
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Council “members-only” web sitewww.registration123.com/zurich/NARMC/SITE
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Coming soon!
The NEW Zurich Virtual Concierge!
You’re “personal” Zurich HelpPointYou’re very own Zurich “p-url”
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NEW! Virtual Literature
Rack
Zurich and Global Corporate Update
Mario P. VitaleCEO, Global Corporate
14
Global Corporate CEO - My new role
ZFS 2008 Financial Results – an overview
What can you expect from Zurich? – 2009 Strategy
WEF Report
State of the Market – an overview
Q & A
15
Global Corporate CEO – My new role
GC CharimanGeoff Riddell
GC CEOMario Vitale
GC CUOAlan Fairhead
GC COOAnn Haugh
GC HR Business PartnerRobin Buendia
GC Customer & Distrib.David Martin
GC CFOMike Reid
GC CCOChris Barnes
CEO GCiEThomas Hürlimann
CEO GCiNAMario Vitale
CEO GCiAPHugh Robson
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Global Corporate CEO - My new role
ZFS 2008 Financial Results – an overview
What can you expect from Zurich? – 2009 Strategy
WEF Report
State of the Market – an overview
Q & A
17
1 Snapshot on the summarized consolidated results of the Group for the YE Dec 31, 2008 & 2007 respectively. These are unaudited results that should be read in conjunction with the ZFS Group Annual Report 2008 for further details
2 Parentheses around numbers represent an adverse variance3 After tax, as % of APE (Annual Premium Equivalent)4 Margin on gross earned premiums of the Farmers Exchanges. Zurich Financial Services has no ownership interest in the Farmers Exchanges. Farmers Group,
Inc., a wholly owned subsidiary of the Group, provides management services to the Farmers Exchanges and receives fees for its services.
ZFS 2008 Financial Results – Highlights1
In USDm 2008 2007 Change2
Business Operating Profit 5’186 6’707 (23%)Net income attributable to shareholders 3’039 5’714 (47%)General Insurance combined ratio 98.1% 95.6% (2.5 pts)Global Life New Business margin3 23.1% 24.7% (1.7 pts)Farmers Mgmt Services managed GEP margin4 6.9% 6.8% 0.1 ptsReturn on common shareholders’ equity (ROE) 12.1% 21.3% (9.2 pts)Business operating profit (after tax) ROE 16.8% 18.9% (2.1 pts)
Source: ZFS Financial Report 2008
Zurich achieved impressive results in a challenging environment, recording its 24th quarter of profitability with a BOP over 5 USD billions and delivering a 12.1% ROE to our shareholdersGI GWP and policy fees were up 4% and the combined ration was 98.1%Global Corporate contributed to the results
18
Zurich’s current ratings
How analysts commented our 2008 result
“That the company could have achieved such a performance in such a difficult macro environment we think is a strong testament to its resiliency and defensiveness. With operating performance expected to stay good, capital should regrow relatively quickly in our view.”
Brian Shea, Merrill Lynch
“ The group is not immune to the credit crisis, but solvency ratio I ratio per year end 2008 is a solid 153% and as such the group remains well placed to weather the current credit crisis and benefit from a possible hardening of rates in the US non life market.”
Andreas VanEmbden, Cazenove
Financial Strength Rating S&P Moody’s A.M. Best Fitch
- Zurich Insurance Company AA-/Stable A1/Stable A/Stable A+/Positive
- Zurich American Insurance Co. AA-/Stable n.r. A/Stable n.r.
- Zurich Australian Insurance Ltd. A+/Stable n.r. n.r. n.r.
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Perfect Storm
Decreased investment
income
Worldwide recession
Record breaking
catastrophes
Prolonged, deep soft market
20
Economic Outlook for 2009
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Global Corporate CEO - My new role
ZFS 2008 Financial Results – an overview
What can you expect from Zurich? – 2009 Strategy
WEF Report
State of the Market – an overview
Q & A
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What can you expect from Zurich?Global Corporate priorities for 2009
We continue delivering on our Strategy …
ProfitabilityExpense ManagementTalent ManagementGC Transformation ProgramChange Management
23
What can you expect from Zurich?Global Corporate priorities for 2009
… in order to deliver what our customers need…
A strong financial partnerOperational excellenceGlobal and integrated insurance solutions The right people who think globally & act locallyDelivery “when it matters”
ONE ZURICH Experience
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What can you expect from Zurich?Global Corporate priorities for 2009
…and become a true Market Leader!
„GC will be recognized as the most relevant supplier of products and solutions to corporate customers throughout the world,
whilst operating efficiently and effectively“
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Global Corporate CEO - My new role
ZFS 2008 Financial Results – an overview
What can you expect from Zurich? – 2009 Strategy
WEF Report
State of the Market – an overview
Q & A
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Global risks have increased
Economic Environmental Geopolitical Societal TechnologicalFood price volatility Climate change Terrorism Pandemics Breakdown of CII
Oil / gas price spike
Loss of fresh water Collapse of NPT Infectious
diseases Nanotechnology
Major fall in US$ Desertification US/Iran conflict Chronic diseases
Chinese hard landing Earthquakes US/DPRK conflict Liability
regimes
Fiscal crises Inland flooding Afghanistan instability
Asset price collapse Cyclone
Transnational crime and corruption
Retrenchment from globalization
Israel-Palestine conflict
Violence in Iraq
Increased riskUnchanged riskDecreased risk
Key:
Change in 27 risks also included in 2008 report
Source: Global Risks Report 2009 / Zurich
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Strongercorrelation
Current account deficit / fall in US$
International terrorism
Pandemics
Climate change
Retrenchment from globalisation
China economic hard landing
Middle East instability
Developing world disease
Inland flooding
EarthquakesChronic disease in developed countries
Interstate and Civil Wars
Transnational crime and corruption
Asset prices
Oil price shock
Emergence of nanotech risks
Tropical storms
Failed and failing states
Fiscal crises
Breakdown of CII
Loss of freshwater services
Spread of liability regimes
Proliferation of WMD
Key:
Why worry?
Source: Global Risks Report 2009 / Zurich
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A remarkable neglect in the C-Suite
Source: PwC 11th Annual Global CEO Survey
Percentage of CEOs concerned about specific risks
0 10 20 30 40 50 60 70
Economic downturn
Energy security
Supply chain
Climate change
Terrorism
Pandemics
2007 2008
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The need for comprehensive Enterprise Risk Management
ERM
Corporate FailuresLarge Catastrophes• WorldCom• Enron• Credit crisis
Industry Initiatives
• Treadway Report, US• Turnbull Report, UK• Dey Report, Canada
Best Practices• Banks• Asset Managers• Energy Firms• Corporations
Regulatory Actions• S.E.C.• Sarbanes-Oxley• Basel II• Regulators• ISO 31000 (July ‘07)
Source: Zurich Financial Services
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We do it at Zurich, too
TRPs for Business Segments
TRPs for Business Divisions
TRPs forRegions and Business Units
Inpu
t fo
r th
ough
t st
arte
rs
Gro
up K
ey F
ocus
Poi
nt Group TRP
Source: Zurich Financial Services
31
Our challenge: Integrate global risks into ERM
The corporate sector is under-investing in the mitigation of global risks
Investments should be undertaken within a comprehensive enterprise risk management framework
Technical sophistication is less important than planning for the next crisis
Don’t be surprised by the predictable!!
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Global Corporate CEO - My new role
ZFS 2008 Financial Results – an overview
What can you expect from Zurich? – 2009 Strategy
WEF Report
State of the Market – an overview
Q & A
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Market & Industry forecast
Hardening market for global corporate with some other segments experiencing no turn in rates until late 2009, early 2010
Another above average hurricane season
Large industry losses from Madoff scandal
Recession expected to last throughout the year
New administration in The White House
New surprises not yet uncovered
Changes in competition due to financial stress
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Market & Industry Forecast – Zurich response
Mario VitaleCEO Global Corporate ZFS
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Global Corporate CEO - My new role
ZFS 2008 Financial Results – an overview
What can you expect from Zurich? – 2009 Strategy
WEF Report
State of the Market – an overview
Q & A
Looking into the Abyss
Daniel M. HofmannGroup Chief EconomistZurich Financial Services
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Disclaimer and cautionary statementCertain statements in this document are forward-looking statements, including, but not limited to, statements that are predications of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Zurich Financial Services undertakes no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise. This communication is directed only at persons who (i) have professional experience in matters relating to investments or (ii) are persons falling within Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc) of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (as amended) or to whom it may otherwise lawfully be communicated (all such persons together being referred to as relevant persons). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons.
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Global trade is at a standstill
Source: Thomson Datastream
Baltic Exchange Dry Index
0
2'000
4'000
6'000
8'000
10'000
12'000
01/04 09/04 05/05 01/06 09/06 05/07 01/08 09/08
General macro
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The recession is on for some time now…
Source: Zurich
General macro
2008
Economic activity index for the United States and Germany
-5
-4
-3
-2
-1
0
1
2
1993 1995 1997 1999 2001 2003 2005 2007
United States Germany
Values below -1 denote a recession
2009
40
… there is no quick end in sight… General macro
Source: Thomson Datastream
Leading indicators for the US and Germany
-25-20-15-10-505
101520
1992 1994 1996 1998 2000 2002 2004 2006 2008
y/y-ch
ange
in p
erce
nt
ECRI (US) Business expectations (GER)
41
General macro Financial stress at exorbitant levels
Source: Zurich
US financial stress indexWeek of February 20, 2009
-2
-1
0
1
2
3
4
5
6
01/07 07/07 01/08 07/08 01/09
Stan
dard
dev
iatio
ns fr
om m
ean
March 17: Collapse of
Bear Stearns
July 13: Extensive financial aid for
Fannie Mae and Freddie Mac
November 19:Fear of huge credit card debts
October 8: Global slump of equity markets
September: Collapse of Lehman and AIG
42
Global banks were hit hard
Source: Bloomberg / Feb 20, 2009
Includes AIG Includes AIG
Writedowns Accumulated, USD billions
0100200300400500600700800900
1000
HY 08 FY 08 YTD 09
Asia Europe Americas
Capital raised Accumulated, USD billions
0
100
200300
400
500
600
700800
900
1000
HY 08 FY 08 YTD 09
Asia Europe Americas
The financial sector
43
Insurers to feel more pain
Source: Bloomberg / Feb 20, 2009
But more asset write-offs to come
The financial sector
Losses and replenishmentsSince October 2007; in USD billions
48.9
18.6
40.1
10.33.7
20.3
0
20
40
60
80
100
120
Writedowns* Capital raised*
Monolines P&C Life
* without AIG
44
The financial sector Rapid adjustment in the US stock market
Source: Datastream, Zurich
Mature market equitiesIndex = 100 at market peak
40
60
80
100
-300 -150 0 150 300 450 600Days relative to market peak
Perce
nt
2007 - 2009 1999 - 2001
Index peaks2007-2009: Oct 31, 2007 1999-2001: Mar 28, 2000
1968-1977
1958-1967
1948-1957
1995-2007
1988-1997
1978-1987
Decades
19911941 19511890 1886187019951997
1957196619732001
1982
1961196319671976
19831996199819992003
1932
1903191319141929
19341939194019461953196219691977195119902000
1905
1892189718981904
191819191921192619441949195219591954196519681971197219791986198820042006
1877
1871187218741875
1881186718891891189418951896189919021906191119121916192319471948195619601970
19841978
1987
19931992
1994
20072005
19351939
19171920
19421943
18831887
18641878
18681869
19351958
191319541974
2002
193619381945
1930
183718411854
1910
190019011909
1925
184518511853
1882
183518471848
1858
184218441856
195019551975
187318841893
191519221934
186018611876
184918501855
1859186518661867
1937 184318631928
186218791885
185719071910
183019081927
182518281831
184618521880
182718331835
182918321834
182618361840
1911
We areWe are herehere
2008
-50 to -40
-40 to -30
-30 to -20
-20 to -10 -10 to 0 0 to 10 10 to 20 20 to 30 30 to 40 40 to 50 50 to 60
1839
Truly a once in 100 years event
The financial sector US total market returns 1825-2008
46
A framework for analysis From the financial to the real cycle
In the past, the real cycle lagged the financial cycle by 7 to 12 months
Higher creditlosses
Reduced creditsupply
Weakereconomy
Real economy drivenFinancial markets driven
AsseAsset t
salessales
Falling Falling asset asset valuesvalues
LeverageLeveragetoo hightoo high
Capital Capital reducedreduced
47 Close down for long
period
Glo
bal
cred
it
a
nd c
apit
al m
arke
ts
Severe slowdown Moderate slowdownEconomic activity
Limited constraints
Slow recovery
Peak to trough>12 months
-------------Recovery
18 – 24 months
Long freeze
Peak to trough>12 months--------------Recovery
6 – 10 years
Quick fix
Peak to trough6 – 9 months
Roller coasterPeak to trough6 – 9 months----------------False dawn
3 – 6 months---------------------Peak to trough6 – 9 months
A framework for analysis Stylized recession types
48
Implications for insurance A hard market?
Source: CIABSource: ISO/Zurich
“The soft market trend has turned” – MarketScout, January 7, 2009
US policyholder surplusUSD billions
370390
410430
450470
490510
530
2007 2008 2009
Forecast
Expected decline of 25% in '08
Reversal in rate changesUS commercial business; average all lines
-15%
-12%
-9%
-6%
-3%
0%
3%
6%
9%
12%
15%
18%
21%
2002 2003 2004 2005 2006 2007 2008
KatrinaRitaWilma
2009 expectations:
- Commercial property, non CAT - Commercial property, CAT- Energy, Gulf of Mexico- Energy, other- Marine hull- Airline
Δ in %
0-1010-25
50-10010 5 5
Source: Merryll Lynch
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Implications for insurance The market’s view on competitors
5-yr CDS spreads on January 30, 2009
0 200 400 600 800 1'000
XL
AIG
Swiss Re
Aviva
ING
Axa
Zurich
Ace
Allianz
RSA
GeneraliExtreme spread widening; upward shift for all firms and three segments with Zurich comfortable in the middle of the top tier
II
III
I
Source: Thomson Datastream
5-yr CDS spreads on June 30, 2007
0 5 10 15 20 25 30 35
XL
Ace
AIG
Swiss Re
Zurich
RSA
Axa
Allianz
ING
Aviva
GeneraliVery compressed spreads with three segments; little differentiation within segments, and Zurich in the middle of the second tier
III
II
I
50
Real GDP forecast 2008 - 2010
2008 2009 2010United States 1.2 -1.6 0.7
Euro area - Germany - Italy - Spain
0.91.3
- 0.51.2
- 2.0- 2.5- 2.1- 1.7
0.20.1-0.1-0.1
United Kingdom 0.8 - 2.8 0.2
Switzerland 1.8 - 0.9 0.6
Japan -0.3 - 2.6 0.4
Source: IMF / Zurich /Créa
Appendix 1
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2008 2009 2010United States 4.0 -1.0 1.9
Euro area - Germany - Italy - Spain
3.42.83.64.2
0.50.30.60.7
1.10.61.01.8
United Kingdom 3.6 1.0 1.4
Switzerland 2.5 0.2 1.2
Japan 1.4 -0.5 -0.2
CPI inflation forecast 2008 - 2010
Source: Oxford Economics
Appendix 2
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Forex adjustments are underway
Source: Thomson Datastream
Appendix 3
Trade weighted exchange ratesJan 2000 - Feb 2009
70
90
110
130
150
170
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Inde
x 199
0=10
0
USD EUR GBP JPY
Zurich’s perspective on the financial and insurance markets
Mike KernerGlobal CUO, General Insurance
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Agenda
1. Zurich’s Perspective on the Financial and Insurance Markets (including reinsurance)
2. Zurich’s Review of Counter Parties for Reinsurance (beyond the rating agencies)
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The recession is on for some time now…
Source: Zurich
General macro
Economic activity index for the United States and Germany
-5
-4
-3
-2
-1
0
1
2
1993 1995 1997 1999 2001 2003 2005 2007
United States Germany
Values below -1 denote a recession
2008
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… and there is no quick end in sightGeneral macro
Source: Thomson Datastream
Leading indicators for the US and Germany
-25-20-15-10-505
101520
1992 1994 1996 1998 2000 2002 2004 2006 2008
y/y-ch
ange
in p
erce
nt
ECRI (US) Business expectations (GER)
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Higher creditlosses
Reduced creditsupply
WeakereconomyAsseAsse
t t salesale
ss
Falling Falling asset asset valuesvalues
LeverageLeveragetoo hightoo high
General macro From the financial to the real cycle
Financial markets driven Real economy driven
Capital Capital reducedreduced
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Stress imposed relative to June 30, 2008• Equities -25% • ABS -
5%• Real estate -15% • BBB/A -
5%• Alt A -10% • AAA/AA -2%• Subprime -20%Source: Citibank
Capital buffers relative to S&P "A" ratingTop 10 European insurers
-50
-30
-10
10
30
50
70
01 02 03 04 05 06 07 08E Stress
Varia
nce i
n EU
R bi
llions
Similar loss in financial strengthbut from different starting points
Implications for insurance Solvency could become an issue
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Implications for insurance Bond yields are falling
Source: FxStreet.com, US interest rates
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Implications for insurance Reinsurance capacity is constrained
Capital constraints in place
Capital Markets (temporarily??) shut down
Withdrawal of Hedge Fund and Private Equity Capacity
Reinsurers’ “ReLoad” Strategy in question.
Reinsurance Prices are Going Up
61
Implications for insurance Pricing Needs to Increase
Profits and Financial Strength must come from Underwriting.
Balance sheets must be rebuilt.
The price of Risk must be fully and correctly priced.
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Agenda
1. Zurich’s Perspective on the Financial and Insurance Markets (including reinsurance)
2. Zurich’s Review of Counter Parties for Reinsurance (beyond the rating agencies)
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Zurich’s View of Reinsurance
Purposes of Reinsurance (partial list)Primarily, a Form of Risk CapitalA vehicle to take volatility out of EarningsFacilitates Risk Sharing, Retention and SpreadingA Source of Market/Product Expertise
Advantages“Annual” optionalityFlexible in design
DisadvantagesReinsurance Recoverables are Illiquid and UntradableEmbedded Credit RiskEmbedded Accounting/Operational Risk
We fundamentally believe that markets workArbitrage Opportunities are RareSavings through risk diversification are possible
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Strategy – Optimize Reinsurance Purchasing
The total reinsurance spend of the Group was USD 5.9bn in 2007.The Cession Rate of General Insurance decreased from 16.1% to 15% in 2007.Cession rate reduction was mainly achieved by increasing retentions and eliminating working layer covers. Premium Growth of the Group also contributed
USDm
Reinsurance Spend and Cession Rate (r.s)
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2001 2002 2003 2004 2005 2006 200712%
15%
18%
21%
24%
27%
Total Ceded Premium Cession Rate - General Insurance
65
Reinsurance Governance Starts with Zurich Risk Policy
Zurich Risk Policy - Chapters 2, 4 and 7
Global Head of Group
Reinsurance
Heads of Group Re Purchasing Centers
Reinsurance Account
Managers
Financial Credit Risk AnalysisAnalytical Evaluation
Catastrophe analysis
Tools and capabilities
Reinsurance Strategy
Daily Management
Corporate Reinsurance Security CommitteeAuthority Statements
Oversight processes
Group Finance CommitteeGroup Reinsurance
CommitteeGroup Controller DepartmentBD Reinsurance Networks
Group Balance Sheet Committee
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Approval process for reinsurers
Zurich Risk Policy (ZRP) defines the acceptable limits per reinsurer reflecting the respective credit quality and Zurich’s capital base.
Limits consider exposure net of collateral
Group Risk Management analyzes all the reinsurers and applies an internal rating which might deviate from the official ratings
Based on independent financial analysis and additional insights
Corporate Reinsurance Security Committee (CRSC) decides about the acceptability of reinsurers and sets potential limitations or restrictions individually for each reinsurer.
e.g. short-tail vs. long tail acceptability
Group Credit Risk Management (GCRM) continuously monitors the developments in the markets in order to quickly implement appropriate correction measures.
GCRM perform stress tests assuming multiple global natural catastrophe events and a simultaneous financial market crisis.
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Reinsurance Assets - Measures already taken
Continuous reduction of purchased reinsurance.
Corporate Reinsurance Security Committee (CRSC) approves acceptable reinsurance partners applying the Zurich Risk Policy guidelines for credit risk.
Created Reinsurance Asset Management Team in 2005 leading to the following achievements:
Implemented single name credit default swap program and purchased protectionNegotiated collateral agreements with reinsurance companiesContinuous evaluation and execution of commutation opportunities Introduced stringent termination and off-set clauses into the reinsurance contracts
Questions?
New Products / Solutions
Michael GarceauCOO & CFO, Specialties
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Agenda
Zurich OverviewSpecialties OverviewSpecialties NAC - OrganizationNew Products / Solutions
Cyber LiabilitySpecialty E&OUmbrellaCorporate D&OTrade Credit
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Zurich Overview
Global franchise doing business in 170 countriesStrong & stable financial ratings (S&P AA-)Delivered a 1% return on $180b of invested assets (as of 12/31/08)Business Operating Profit (BOP) of $5.3b in 200824 consecutive quarters of profitability
Financial strength is critically important during these challenging times, particularly on long-tailed
business
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Specialties Overview
A top tier player in our chosen Specialty lines in the US with $2.4b GWP in 2008Over 600 employees across North America in 24 officesCenter of technical expertise and underwriting knowledge for specialty linesIntegrated approach to assessing risks (Underwriting, Claims and Actuarial)Committed to delivering distinctive products for unique risks through our focused approach to serving customer needs
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Specialties NAC - Organization
PresidentSeraina Maag(212) 553 33 13
Medical PL
Specialty E&OCyber Liability
Corp. D&O
MM D&O
EPLICaptiveAgents
Crime
CorporateAccident
Occ. Accident
Disability
Specialty Health
GroupUmbrella
XS Casualty
SpecialCasualty
Professional Liability
Marcia Munn(212) 859 26 70
ManagementLiabilitySalvatore Pollaro(212) 553 55 31
A&H
Bryan Salvatore(212) 553 56 97
Casualty
Bob Shine(212) 553 57 51
Railroad
A&H Sales
Surety, Credit & Political RiskDaniel Riordan(202) 585 31 01
Political Risk
Trade Credit
Core Surety
Large Surety
International Surety
Commercial Surety
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New Products / SolutionsProfessional Liability
Cyber Liability (Security and Privacy Liability)What’s New – Security & Privacy product expected to be released in June 2009, coverage for 1st and 3rd party risks is availableAppetite – Wide range of industry classes, specifics still evolvingCapacity – To be finalized, likely in the $10m rangeExpertise – Brad Gow, formerly of ACE has been hired to lead the Specialty E&O group. Brad has extensive background in network security issues.
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New Products / SolutionsProfessional Liability
Specialty E&OWhat’s New – Zurich Pro Plus was released in the marketplace late 2008 (feedback from Brokers has been excellent)Appetite – Engineering, technology, real estate, media, specified professions (e.g., consultants) with three distinct revenue bands– $1 - $5m– $15m to $1b– > $1b (excess policies only)
Capacity – up to $10mExpertise – dedicated Specialty E&O team led by Brad Gow providing specialized regional underwriting support, specialized claims, centralized administration and focus on ease of doing business
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New Products / SolutionsCasualty
UmbrellaWhat’s New– Now offering coverage above a SIR, Important change driven
by customer need / feedback– Appetite – wide range of small-to-medium size businesses – Capacity - $1m - $25m
General– Sustainable and consistent provider of coverage– Broad appetite with limits up to $50m– Flexible A/B form following primary coverage helps reduce
likelihood of gaps in coverage, no territory restrictions
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New Products / SolutionsManagement Liability
Corporate D&OWhat’s New– Zurich Specialties will release a new, state of the art policy form at RIMS
(April 19 – 23), incorporating numerous benefits and policy enhancements requested by brokers and customers
– Appetite – Fortune 2000 companies, although can provide solutions for middle market companies as well
– Capacity - $25m on a primary or excess basisGeneral– Broad appetite with limits up to $35m– Multinational capabilities, critical for global customers– Flexible and responsive manuscripting
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New Products / SolutionsSurety, Political Risk and Trade Credit
Trade Credit (Domestic xs. Credit)What’s New - New product offers protection from losses associated with the non-payment of trade related receivables by the insured’s customers due to financial or political eventsAppetite – Broad appetite ranging from middle market to Fortune 500 companiesCapacity - Policy limits up to $75m and single obligor limits up to $37.5mExpertise - Hired new team from AIG (John Pellew)
Round-table / Open discussion
Facilitated by:Paul HorganCUO, Global Corporate,North America
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Open discussion
Risk Profile Map What risks are keeping you up at night?
Collateral New Considerations*
*(bank quality, bankruptcy law / interpretations vis a vis cash as collateral, Reg 114 trusts, add'l fee's / premium in lieu of collateral)
What creative solutions to collateral council members have experienced / heard about
Other
Closing & next steps
Mario P. VitaleCEO, Global Corporate
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THANK YOU for
Participating!
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Meeting Participants
Council MembersSteve Allison – The Shaw Group Inc.Dan Baldwin – Leggett & PlattDavid Binder – Nestle USATim Bunt – CB Richard Ellis, Inc.Vince Coffey – Novelis Inc.Mark Davis – Constellation Brands, Inc.Stacey Regan - GEManny Difilippo – George Weston LimitedHoward Edelstein – Sealed Air CorporationLance Ewing – Harrah’s EntertainmentChris Gallagher – Procter & GamblePaula Gentile – MGM MirageGreg Hoff – The ServiceMaster CompanyLeslie Lamb – CiscoGlenn Peterson – EWI Inc.Paul Prouty – Newmont Mining CorporationDebbie Rodgers – AramarkScott Sanderson – Koch Industries Inc.Scot Schwarting – WhirlpoolAlain Simard – Saputo Inc.Claudia Temple – Kraft Foods Inc.Heidrun Toben – Alstom Power, Inc.
Zurich Mario Vitale – CEO, Global CorporateChris Barnes – CCO, Global CorporateRon Davis – EVP, Head of Customer Management, Zurich
Financial ServicesJP Fowler – EVP, Relationship Management, Global
Corporate in North AmericaMichael Garceau – COO & CFO, Specialties, North
America CommercialAnn Haugh – COO, Global CorporateMonique Hesseling – CMO, Global EnergyDaniel Hofmann – Group Chief Economist, Zurich
Financial ServicesPaul Horgan – CUO, Global Corporate in North AmericaMike Kerner – CUO, Zurich Financial ServicesBrenda Lombardo – SVP, Head of Marketing, Global
Corporate in North AmericaGreg Maguire – EVP, Head of Customer & Distribution
Management, Global Corporate in North AmericaKevin McCracken – EVP, Head of Casualty, Global
Corporate in North AmericaJoe Tocco – EVP, Head of Property, Global Corporate in
North AmericaUrs Uhlman – SVP, Head of Corporate Business, Global
Corporate Canada