Magazine article Risk Management

Navigating a Perfect Storm: Mario Vitale, CEO of Global Corporate for Zurich Financial Services, Discusses What the Insurance Industry and His Company Are Doing to Stay on Course through Turbulent Economic Waters

Magazine article Risk Management

Navigating a Perfect Storm: Mario Vitale, CEO of Global Corporate for Zurich Financial Services, Discusses What the Insurance Industry and His Company Are Doing to Stay on Course through Turbulent Economic Waters

Article excerpt

How would you gauge the current state of the insurance industry and, more specifically, the state of Zurich?

We have seen an unprecedented combination of events in the last 14 months. If you combine that with the economy, it made for the perfect storm for the insurance industry. However, I think it's actually faring better than most of the other financial industries and most people agree.

If you look at the last 200 years, that's overwhelmingly the case. The insurance industry weathers all types of economic downturns as well as spikes. So, certainly, I feel good about the industry as a whole against the backdrop of the economy.

A good example is Zurich itself. We just posted our 24th [consecutive] quarter of profitability. We had a strong financial balance sheet. We showed our disciplined approach to our investment portfolio and our risk management approaches have also really paid off.

What should the insurance industry be doing to ensure it can endure the current crisis and reposition itself to be stronger than ever once the economy turns around?

[ILLUSTRATION OMITTED]

The World Economic Forum report states that the world, including the economic environment, is getting riskier in almost every way--in regards to both natural and man-made risk exposures. One of the things the report points out is the need for comprehensive enterprise risk management and a very professional, well-done, total risk profile. It will allow risk managers, CFOs and other C-suite executives to see their exposures and then follow the good principles that allow them to eliminate, mitigate or transfer the risk. Proper risk management is a key and the insurance industry itself needs to follow that same advice: financial discipline, operational excellence, focusing on your own value propositions.

With everyone looking to cut costs and maximize budgets, what should policyholders be doing in these times to ensure they're getting the best coverage for the best price?

It's important to make sure that the cutting cost doesn't include increasing risk. When it comes to actually purchasing the coverage, an important part of the value proposition for the customer is to make sure that they differentiate themselves in the marketplace. When they go to the market together with their brokers, they should be reaching out to the underwriter, having the underwriter meet with them, talk with them, make sure they understand their risk, make sure they know what they're doing to weather the storm and make sure they're not lumped in with every other customer in that same class of business. …

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