Magazine article American Banker

Zurich Chief: Rethink the 'Nature of Risk'

Magazine article American Banker

Zurich Chief: Rethink the 'Nature of Risk'

Article excerpt

The insurance industry will take a large financial hit from the events of Sept. 11 but will emerge stronger if it can learn how to operate in a new environment and "think the unthinkable," according to Rolf H ppi, chairman and CEO of Zurich Financial Services.

The coming hard market for insurance "is an industry opportunity to deal with some of the issues in a manner that is slightly more sane than we have done in the past," Mr. H ppi said, alluding to the price-slashing and looser underwriting criteria prompted by competition in recent years.

He spoke Tuesday at a PricewaterhouseCoopers conference on the property/casualty industry.

His company is one of the world's largest reinsurers, and it also sells property/casualty insurance at retail through its Farmers Insurance Group unit in Los Angeles. Farmers formed an alliance this year with Bank of America to put Farmers agents in some bank branches to sell auto, homeowners, umbrella, and other personal lines property/casualty coverage.

Mr. H ppi said the insurance market has responded to Sept. 11, despite its scale, much as it has responded to natural catastrophes like Hurricane Andrew -- with higher prices and capital flowing into the market through new Bermuda reinsurers.

His current estimate of costs to the insurance industry from the terror attacks is about $60 billion, Mr. H ppi said. PricewaterhouseCoopers has said that about $12.5 billion of capital has been committed to reinsurance ventures since Sept. …

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