Zurich Insurance Group AG, Switzerland’s biggest insurer, plans to cut spending on large technology projects as it seeks to reduce costs, according to Chief Risk Officer Cecilia Reyes.
“Managing, harvesting the benefits from these investments” is a challenge, Reyes said in a Jan. 11 interview at Bloomberg’s London office. “We will cut that back and be more focused.”
Chief Executive Officer Mario Greco has said he wants to “attack” costs and save $1.5 billion from 2015 through 2019. Along with its European rivals, Zurich Insurance has struggled to improve profitability as lackluster economic growth and record-low interest rates hurt investment income and prices in some markets remain subdued.
“We’re being much better investing in technology, outsourcing, procurement,” Reyes said. “That will be the source of growth of profits, not growing the top line.”
She did not rule out job cuts, saying the Swiss insurer has “many levers to pull to manage our costs.” Zurich Insurance plans to expand its businesses in Latin America and Asia in 2017 while boosting underwriting revenues in developed markets, Reyes said.
Zurich Insurance, which has several offices across the U.K., is also weighing moving operations if Brexit leads to companies losing the passporting rights that allow them to sell products and services throughout the European Union, Reyes said.
“Passporting rights are very important for Zurich,” she said. “And passporting into Britain is very important.”