Schinzler, Hans-Jürgen 1940–
Chairman of the board, Münchener Rückversicherungs-Gesellschaft
Born: October 12, 1940, in Madrid, Spain.
Education: Attended University of Würzburg; University of unich, JD, 1969.
Career: Internships in France and the Netherlands, 1964–1968; Bayerische Vereinsbank, 1968–1969, banker's training; Münchener Rückversicherungs-Gesellschaft, 1969–1981, position in finance and loan reinsurance; 1981–1993, member of the management board; 1993–2004, CEO; 2003–, chairman of the board.
■ Hans-Jürgen Schinzler was a very private man and yet one of the most powerful figures in the German finance industry in the 1990s. Reluctant to step into the limelight, Schinzler preferred to focus on business and grew Münchener Rückversicherungs-Gesellschaft (Munich RE) into the largest reinsurance company worldwide. Through Schinzler's creation of ERGO Insurance Group, Munich RE also became the second-largest primary insurer in Germany. Allianz was the market leader in primary insurance, but Munich RE and Allianz owned 21 percent of each other's corporate assets. This link proved detrimental to Munich RE in the early 2000s, resulting in Schinzler's resignation as CEO of the company in 2004. He continued to serve as chairman of the board, however, and saw Munich RE settle back into stability and profitability.
FROM LAW TO BANKING
Schinzler was born in Madrid, Spain, on October 12, 1940, and studied law in Würzburg and Munich. Upon completion of his first state examination, he took practical training
in legal work via internships in France and the Netherlands from 1964 to 1968. This experience prompted Schinzler to seek out similar international exposure in his new hires to Munich RE. At the end of his internships, he wrote his doctoral dissertation and took his second state examination in Munich. He entered the training program of Bayerische Vereinsbank in 1968.
STEPPING INTO A LIFETIME CAREER
After his banker's training, Schinzler joined Munich RE in 1969. At age 29, Schinzler was responsible for finance and loan reinsurance. In 1981 he was named to the board of Munich RE. His disciplined and calm approach earned him an appointment as CEO in 1993. The previous CEO, Horst Jannott, was considered the firm's patriarch. "Schinzler's calm style was much different from the sometimes rumbling Jannott—but hardly less effective," wrote the Financial Times Deutschland reporter H. Fromme (April 29, 2003). Signifying a new leadership style, Schinzler commissioned the sculpture of the 17-meter high Walking Man by Jonathan Borofsky, which would become a landmark sculpture to grace the entrance of the company's newly built Building 5 on the Leopoldstrasse in 1995. In a speech and letter to shareholders (1995/1996 Annual Report ), Schinzler said: "This figure allows many interpretations. What we chiefly associate with it are presence, progress, vigour, strength and confidence—the very qualities that are important both to our clients and to our shareholders."
A SISTERHOOD OF COMPANIES
Munich RE was known for other investments in art and architecture, including an underground network of tunnels that connected various business buildings. These connections symbolized other alliances as well. Munich RE and Allianz had been intertwined since their inception. Both founded by Carl Thieme in the late 19th century, the companies owned up to 25 percent of each other's shares. Schinzler also had close ties with Allianz's CEO, Henning Schulte-Noelle, resulting in frequent private meetings. German media speculated that the companies followed each other's corporate moves closely and tended to take cues from each other.
Schinzler denied such speculation. Marc Brost quoted him ("'Ich mag keinen Personenkult'—Der Chef will nicht ins Fernsehen") as saying, "Although we are culturally similar companies, we are both conservative in a positive way and we have a long, linked history. Both companies are marked by the knowledge of being very good in their respective markets and having employees that may be a bit better than others. But we do not divide [the market] between ourselves. In some areas we are harsh competitors, today more than ever." A 1992 investigation by the German Federal Cartel Office prompted a realignment in the insurance business, causing Allianz to cede its controlling interests in three life insurers (Hamburg-Mannheimer Versicherungs, Karlsruher Lebensversicherung, and Berlinische Lebensversicherung) to Munich Re.
STRATEGIC DIVERSIFICATION WITHOUT FANFARE
In 1996 Schinzler expanded on the primary insurance business by taking over Deutsche Krankenversicherung (DKV). Schinzler combined DKV, Victoria, Hamburg-Mannheimer and D.A.S. Versicherungen into a new subsidiary, ERGO Insurance Group. In 1998 ERGO accounted for 50 percent of all of Munich RE's revenues. Fromme reported (April 29, 2003): "He slimmed down the reinsurer comprehensively, ensured that it maintained its leading position in the global market, and skillfully arranged the creation of the German second-largest primary insurance firm, wholly-owned ERGO, in 1996, at minimal cost to the Munich-based parent company."
Munich RE acquired American RE in 1996 as well, thus expanding into the American market. Further diversifying its operations, Schinzler coordinated the creation of MEAG MUNICH ERGO Asset Management in 1999, a joint venture between Munich RE and ERGO to provide asset management of all the insurance companies in the group and also manage investments for third parties.
Owing to a significant number of natural disasters, 1999 proved to be a difficult and costly year for reinsurers. To recoup its significant losses, Munich RE expanded both its reinsurance and primary insurance operations into key markets in Europe, North and South America, and Asia. The company bought CNA Financial's life reinsurance operations. In conjunction with Swiss RE, Internet Capital Group, and Accenture, Munich RE founded an electronic market place, inreon, in December 2000.
SHUNNING THE LIMELIGHT
Schinzler did not like analyst conferences or public appearances of any kind. He did not believe in justifying his business to outsiders. However, as a result of changing legislation in Germany, Schinzler organized the first analyst conference in the history of Munich RE in 2000. In a rare interview, with Mark Brost, Schinzler said, "One cannot consider oneself unimportant enough…. I don't like a personality cult" ("'Ich mag keinen Personenkult'—Der Chef will nicht ins Fernsehen"). Schinzler felt that the focus should be on the team and the company as a whole: "What makes a reinsurer strong is the work as a team, as important as it is that everyone gives their best," he said. "My best certainly isn't to self-promote. I don't seek out public appearances." Although Schinzler shunned the media, he did not mind involvement with other companies. He has held positions on the boards of Allianz Lebensversicherungs, Aventis S.A. Schiltigheim, MAN, and METRO and has been the chairman of Dresdner Bank, Dresdner Kleinwort Wasserstein, and ERGO Versicherungsgruppe.
CREATING A FINANCIAL POWERHOUSE
In 2001 Schinzler forged an alliance with HypoVereinsbank by acquiring a 25 percent stake in the company. The alliance would allow Munich RE to cross-sell banking and insurance products for further diversification. According to CFO Magazine (June 20, 2002), this turned Munich RE into "a full-blown financial-services firm." "Recognizing and controlling risk is our core business," said Schinzler in an Edit Value interview (March 2002). "To meet it with the highest standard of prevention for people, environment and valuables is intrinsically tied to our economic success."
Although Munich RE touted its significant expertise in the monitoring and forecasting of natural disasters, it was not prepared for the terrorist attacks of September 11, 2001. The company paid out $2 billion in claims. In response, Schinzler said the company would be forced to allocate for future events "that one doesn't even consider possible" (Netzeitung, December 18, 2003). The changes in risk management did not deter Schinzler, however. "Munich RE intends to play an active role in the growth, consolidation, and convergence of the financial sector," Schinzler said in 2002 (BusinessWeek Online, February 18, 2002).
In 2002 Munich RE announced the acquisition of a 10.4 percent stake in Frankfurt-based Commerzbank. "The quiet giant has awakened and is on the move," said Brian Shea, a Merrill Lynch analyst (BusinessWeek Online, February 18, 2002). The excitement proved to be short-lived. American RE required a $2 billion infusion in 2003, and stock prices of Munich RE's major holdings were on a steady decline. Schinzler came under pressure to decrease the company's holdings. Standard &: Poor's downgraded Munich RE's credit rating from AA− to A+ because of weak profits, a diminished capital base, and its exposure to Allianz and HypoVereinsbank, which were both struggling financially. Credit rating is a key factor in a reinsurer's standing, size and tradition being the other two important criteria. In 2003 Schinzler announced his resignation as CEO, appointing Nikolaus von Bomhard as his successor. Schinzler became chairman of the board in 2004, continuing to offer guidance to the company he had served for his entire career.
sources for further information
Brost, Marc, "Die Bruderschaft des Geldes," Die Zeit, December 2001, http://www.zeit.de/archiv/2001/24/200124_muenchener.rueck.xml.
——, "'Ich mag keinen Personenkult'—Der Chef will nicht ins Fernsehen," Die Zeit, December 2001, www.zeit.de/archiv/2001/24/200124_interv._schinzle.xml.
Calabro, Lori, and Alix Nyberg, "The Global 100: Risk Managers," CFO Magazine, June 20, 2002, http://www.cfo.com/article/1,5309,7296%7C%7CA%7C8%7C,00.html.
"Eine Frage der Glaubwürdigkeit," Edit Value, March 2002, pp. 12–13, http://www.kpmg.de/library/periodicals/pdf/editvalue_03_02.pdf.
Fairlamb, David, "Picking Up the Pace at Munich RE,"BusinessWeek Online, February 18, 2002, http://www.businessweek.com/magazine/content/02_07/b3770143.htm.
Fromme, H., "Hans-Jürgen Schinzler: Der ruhige Arbeiter,"Financial Times Deutschland, April 29, 2003.
"Münchener Rück: Abschied des grauen Imperators," Spiegel Online, April 28, 2003, http://www.spiegel.de/wirtschaft/0,1518,246516,00.html.
"Münchener-Rück-Chef steht zu Erstversicherung," Netzeitung, December 18, 2003, www.netzeitung.de/wirtschaft/266035.html.
Schinzler, Hans-Jürgen, "Letter to Shareholders," 1995/1996 Annual Report, http://www.munichre.com/publications/302-00658_en.pdf.
—Maike van Wijk