/By Arabian Post Staff/ Zurich Insurance Group AG has started a process to exit from its general insurance business in the Middle East, pronouncements by the company executives indicated.
Zurich’s general insurance chief Kristof Terryn last week said in an interview that the Middle East business has been put into a ‘run-off’ in view of the ‘limited potential’ of general insurance in the region. It will, however, keep the life insurance business.
The Middle East exit has been attributed to a move to lower costs in relation to premium income, an industry measure known as the combined ratio. Terryn expects the ratio to improve in the second half after stripping out disaster-related losses.
Bloomberg today reported quoting insiders that the company is planning to sell its units in South Africa and Morocco as it works toward turning around its money-losing operations.
Zurich is working with financial advisers on the sale of the units, it said. No agreements have been reached, and the insurer may also decide against a sale, the report added.
Zurich is undergoing a strategic review to reshape its general insurance business after getting hit with unexpectedly high claims. The company abandoned a high-profile takeover bid for RSA Insurance Group Plc and is revamping its top management, bringing in new Chief Executive Officer Mario Greco.
The company is evaluating whether it’s “best placed” to own the business in South Africa, and it’s too early to comment on the result of those deliberations, a spokeswoman for Zurich said. She declined to comment on a potential sale of the company’s Moroccan business. In South Africa, Zurich provides short-term insurance across corporate, commercial and domestic markets, Bloomberg said quoting from the company website.
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