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Zürich Versicherungs-Gesellschaft

Mythenquai 2
CH-8002 Zürich
(01) 205 21 21
Fax: (01) 201 33 97

Public Company
Incorporated: 1872 as Versicherungs-Verein
Employees: 33,250
Assets: SFr50.65 billion (US$32.85 billion)
Stock Exchanges: Zürich Basel Geneva

Zurich Versicherungs-Gesellschaft (Zürich Insurance Company) is Switzerlands largest insurance company and the parent company of one of the most important insurance groups in the world. It has branches in all major countries and owns numerous subsidiaries. While Zürich at first limited its activities to accident insurance and to personal liability insurance, after World War II it extended its business into all classes of insurance.

The insurance business developed relatively late in Switzerland but has gone on to achieve great importance. Initially the basic concepts of the business were taken from neighboring countries and adapted to Swiss conditions. However, Swiss insurance practice, legislation, and expertise reached such a high level that they spread abroad. Zürich played a decisive part in the international activities of the Swiss insurance business from the start.

The original phase of growth in the Swiss insurance business took place in the middle of the 19th century. Its development was sustained by the beginning of industrialization, the building of the railway network, the creation of more efficient credit banks, and the enterprising spirit of the time. Switzerland was emerging at that time as a leading financial center and was set to become one of the most important countries in the insurance industry. The statesman and entrepreneur Alfred Escher made a considerable contribution to the insurance business, and with the founding in 1856 of the Schweizerische Kreditanstalt (Swiss Credit Bank) he paved the way for Zürichs international influence as a financial center.

Initially insurance business was carried out by specialist companies in the individual insurance classes. Two insurance companies in Basel and in St. Gall were already working in marine insurance. As exports were growing, it was felt by Swiss economists and in the countrys financial circles that it was necessary to create another marine insurance company, in Zürich. Seventeen leading manufacturers and traders became members of the founding committee, formed in June 1869 on the initiative of the board of the Swiss Credit Bank. On October 9, 1869, the statutes of the Schweiz Transport-Versicherungs-Gesellschaft (Switzerland Transport Insurance Company) were approved by the ruling council of the canton of Zürich and on January 15, 1870, the company began trading. The first president of the board was John Syz-Landis and the first managing director Wilhelm Berend Witt. It was intended from the outset that the company should be international in its activities.

It soon became apparent to the young company that it required the support of considerable reinsurance, which could not be covered by existing companies. Schweiz therefore took the decision to found its own reinsurance company. The shareholders in Schweiz were invited to take a share in the proposed company through a circular letter, dated October 23, 1872, from a ten-man founding committee under the leadership of John Syz-Landis. The members of the committee already had collaborated in the founding of Schweiz and belonged to the board of the company. The new company was to be run by the firm Versicherungs-Verein and was to take on a part of Schweizs risks in the manner of a surplus reinsurance. By November 16, 1872, the statutes had already been approved by the ruling council of the canton of Zürich. The licensing document carries the signature of the poet Gottfried Keller, who was first state clerk in Zürich from 1861 to 1876, and in that capacity signed the documents for the ruling council.

Close ties existed between the two companies thanks to the unified personnel in all their divisions, operating from one office. Together with reinsurance, the Versicherungs-Verein from its inception also dealt with direct marine insurance both at home and abroad. Substantial damage claims and fierce competition in the insurance markets caused considerable problems for the young company. The direct marine and reinsurance businesses on their own proved insufficiently profitable to sustain the young company, which consequently looked towards new fields of activity.

On a proposal put forward by the board, it was therefore decided at the Versicherungs-Verein general meeting in April 1874 to extend the companys activities to accident insurance. This class of insurance had grown rapidly in importance as industrialization spread. At first, however, this type of insurance had been limited, covering travel insurance and workers insurance. Accident insurance first became available in England, where from 1849 the Railway Passengers Assurance Company was the first to provide insurance cover against railway accidents. Later it was to extend cover to other types of transportation. In Germany a law was first passed on June 7, 1871, which took into consideration the greater risks for employees caused by the increasing mechanization of factories. This law forced manufacturers to pay compensation for any personal injury to their workers. The increased liability made it necessary for companies to insure their work force against accidents in the factory and the requirement brought about the creation of collective workers insurance (Arbeiterkollektivversicherung).

In view of the high level of industrialization occurring in the Swiss economy, it was evident that similar developments would take place in the confederation. The board of Versicherungs-Verein recognized the sign of the times and broke new ground in Switzerland with its introduction of accident insurance. The significance of this step was underlined by the change in the companys name to the Transport- und Unfall-Versicherungs-Aktiengesellschaft Zürich (Transport and Accident Insurance plc Zürich). The importance Swiss industry attached to this branch of insurance is shown by the fact that a further accident insurance company was also created in Winterthur in 1875.

Zürichs growth as a separate company only began with the introduction of accident insurance. Transport insurance was discontinued for the forseeable future at the end of 1880, and the company stopped taking on more reinsurance business. For a while the name of the company stayed as it had been, although from 1886 it added an explanatory sentence to clarify its activities, declaring that the company deals exclusively in accident insurance. When liability insurance began to be developed in Germany as a new branch of insurance alongside accident insurance, with the two branches becoming independent of one another, Zürich also started offering liability insurance. The company was able from then on to offer insurance cover not only against accidents but also against employers liabilities for assessment of damages. The expansion of business into these areas led to the companys change of name to the Zürich Allgemeine Unfall-und Haftpflicht-Versicherungs Aktiengesellschaft (Zürich General Accident and Liability Insurance plc) on December 14, 1894. The company kept this name until 1955. These changes finally brought about the complete separation of Zürich from Schweiz, although friendly relations and business contacts have been preserved. Zürich now began to develop into a worldwide company.

The company first had to build up its own independent work force. Until 1875 Schweizs staff had also taken care of Zürichs business. The development of accident insurance required a specialized staff, both for internal running of the company and for customer services, since this insurance sector catered to a different clientele and operated within a completely different structure. This was particularly the case for liability insurance, with its complex legal aspects. In 1880 the company had 27 employees. By the turn of the century the number had grown to 140. Business in this branch of insurance was stimulated in Switzerland by laws passed between 1875 and 1881 establishing liability for railway and steamer companies as well as for factories.

Together with its activities in Switzerland, company business was extended to other areas at an early stage. The network it was to build up abroad is still its greatest asset in international competition today. The first step was taken as early as 1875 in Germany, where agencies were opened in Berlin, Hamburg, Stuttgart, and Reutlingen. Further areas of business to be developed were the Rhineland, Westphalia, Saxony, and Alsace-Lorraine, the latter at that time part of the German empire. In the same year representative offices were opened in Austria-Hungary and in Denmark. Dealings in France followed in 1878. The Berlin branch which was opened in 1880 came to take on a particularly important role in the companys further development, since it was from here that business in Denmark, Norway, Sweden, Finland, and Russia was coordinated.

At the end of 1880, with the resignation of W. Witt, Zürich was for the first time given its own chief executive, Heinrich Müllen He was devoted to the business and set the company on a firm footing without neglecting the continued development of its activities abroad. His successor, Fritz Meyer, came from the treasury for the town of Zürich and made sure he consolidated the companys technical reserves. During his time in office, from 1900 to 1918, the company erected its own administrative office building on the Mythenquai in Zürich, where the company headquarters are still to be found. Above all, it also developed its workers accident insurance business in France and considerably expanded its business in offering insurance against liability in Germany, where the introduction of the Civil Code on January 1, 1900, extended the need for such insurance into numerous new areas. The companys premium income in 1900 was SFr15.4 million. Business in Switzerland accounted for SFr3.7 million of this total, while France represented the largest premium income with SFr5.5 million, followed by Germany with SFr5 million.

A decisive move for Zürich was the starting up of business in the United States, although Zürich already ran its U.S. subsidiary in Chicago in collaboration with a German fire insurance company. Zürich received the authorization to trade in the state of New York in 1912. The New York insurance commissioner had great influence on other states in the union. The U.S. accident and liability insurance company grew unexpectedly strong and brought in considerable premium income, but was also a heavy burden in terms of provisions and costs. To cover reserves, a large amount of capital was invested in U.S. dollars in the United States; after World War I this capital formed the basis for the further expansion of the U.S. company. Since then it has occupied a particularly important central role in the Zürich insurance groups activities. At the same time Zürich gained a foothold in England, Canada, Italy, and Spain. In 1925 an agreement was made with Ford, the largest car manufacturer of that time, whereby preferential insurance terms were offered on Ford cars.

While establishing branches and founding subsidiaries under its own name in foreign countries according to national law, Zürich also acquired domestic insurance companies. This policy, like the starting of activities in the United States and the creation of a life assurance company for the group, dates from the time of August Leonhard Tobler, who first served as vice director of the company and then became the head of Zürich from 1918 to 1927. It was under his leadership that the company developed into an internationally active insurance group, a status that has continued to grow with the acquisition of substantial insurance companies. The continuity in the management of the company has contributed to this achievement.

During the first 50 years of its existence, Zürichs activities were limited to damage and accident insurance. As a result of the decline of the German currency due to inflation after World War I, the German life assurance companies which held a strong position in the Swiss insurance markets were no longer able to fulfill their commitments in Swiss francs. They were therefore forced to withdraw from Switzerland. Swiss companies filled the gaps created in the market, with the result that numerous new life assurance companies were founded there. In the course of these developments the Vita Lebensversicherungs-Gesellschaft was created as a subsidiary of Zürich. It soon undertook business abroad, where it grew rapidly. It showed pioneering spirit when in 1926 it introduced a health service which offered regular checkups with a doctor and published medical leaflets giving advice on healthy living.

World War II caused the loss for Zürich of important areas of business in central and Eastern Europe. The rebuilding of Zürich in Germany began in Düsseldorf and Frankfurt. The Frankfurt tower block next to the old opera house became the administrative center for the German Zürich network in 1961. A string of further insurance companies is tied to the German branch of the company. The Deutsche Allgemeine Versicherungs-Aktiengesellschaft, founded in 1923, has concentrated particularly on offering motor insurance through direct sales. Zürich resumed its policy of international expansion, which had been halted by the war, in numerous other countries. The company opened many new offices as well as its own life assurance companies, in particular in the United States, Canada, the United Kingdom, and Australia.

The period after World War II was marked for Zürich by its development into a company dealing in all branches of insurance. Due to the systematic extension of the classes covered by the company, the branch-related balancing-out of risks was put alongside the international one. Until the beginning of the 1950s, the emphasis of activities had lain in the field of accident and liability insurance, whose dominant position was expressed in Zürichs slogan The worlds largest purely accident and liability insurer. The company was innovative in its introduction of these branches of insurance in major countries. The companys expansion into further sectors was reflected in its change of name to Zürich Versicherungs-Gesellschaft in 1955. In 1970 fire insurance was also offered by the company for the first time in Switzerland.

The acquisition of large insurance companies and groups in various foreign countries was of crucial bearing on the present scope of the companys business and a policy carried out under the management of Fritz Gerber, the chairman and for many years director general of the company. Three important examples illustrate this policy. In 1965 Zürich bought the Alpina Versicherungs-Aktiengesellschaft in Switzerland, which had established its own network abroad. In 1969 the Agrippina Versicherungs AG was bought from a private bank. Agrippina had been created in Cologne in 1844 as a marine insurance company and was therefore well established in the German insurance market, with a number of subsidiaries of its own. The acquisition in 1989 of the Maryland Casualty Group, with its headquarters in Baltimore, Maryland, greatly strengthened Zürichs business with private customers as well as doubling premium income in the United States.

From 1972, Zürichs centenary year, to 1990, the parent companys gross premiums rose from SFr2.3 billion to SFr6.1 billion, and those of the Zürich insurance group from SFr4 billion to SFr17.1 billion. Zürich does business worldwide in some 80 countries, with a particularly strong presence in its traditional markets in Switzerland, the United States, and Germany. Its successful international development can be attributed largely to the use the company has made of the respected name of the financial center of Zürich together with its historical role in the expansion of accident and of personal liability insurance. With a view to future business in the European Common Market, Zürich International companies have been established in Belgium, Germany, the United Kingdom, France, Italy, and the Netherlands and offer special Euro-policies for industrial insurance. This type of insurance will be supported by computer system Zurinet, ensuring international communication of information. With its experience in accident and liability insurance the Zürich group should continue with its successful development in the European industrial insurance market.

Principal Subsidiaries

Vita Lebensversicherungs-Gesellschaft; Alpina Versicherungs-Aktiengesellschaft; Agrippina Versicherung Aktiengesellschaft (Germany); Deutsche Allgemeine Versicherungs-Aktiengesellschaft (Germany); Maryland Casualty Company (U.S.A.).

Further Reading

Zurich Allgemeine Unfall- und Haftpflicht-Versicherungs-Aktiengesellschaft in Zürich, Die Gesellschaft in den ersten fünfzig Jahren ihres Bestehens 1872-1922, Zürich, Zürich Allgemeine in Zürich, 1923; 75 Jahre Schweiz Allgemeine Versicherungs-Aktiengesellschaft 1869-1944, Zürich, [n.p.], 1945; Zürich Allgemeine Unfall- und Haftpflicht-Versicherungs-Aktiengesellschaft, 75 Jahre Zürich, Werden und Wachsen der Gesellschaft 1872-1947, Zürich, Art. Institut Orell Füssli AG, 1948; 25 Jahre Vita 1922-1947, Zürich, Vita Lebensversicherungs-Aktiengesellschaft, [1948]; Hundert Jahre Schweiz Allgemeine Versicherungs-Aktien-Gesellschaft Zürich 1869-1969, Zürich, Art. Institut Orell Füssli Zürich AG, [1969]; Die Zürich Gruppe stellt sich vor, 100 Jahre..., Zürich, Zürich Versicherungs-Gesellschaft, [1972]; Koch, Peter, Der schweizerische Beitrag zur Entwicklung des Versicherungswesens, Versicherungswirtschaft, 1985; Koch, Peter, Versicherer aus aller Welt in Deutschland, Versicherungskaufmann, July 1987.

Peter Koch

Translated from the German by Philippe A. Barbour