Zurich targets middle market, sees rates rising

Zurich Insurance Group is targeting the middle market and specialty coverages, including the excess and surplus lines market, for growth as it continues to see rates increase across most lines, senior executives of its commercial insurance unit said.

At its investor day presentation last month, Zurich committed to growing its middle-market business to more than $10 billion within three years from its current $7.5 billion and its business operating profit to $4.2 billion from $3.6 billion.

The insurer will achieve the targets through existing operations, although Zurich will consider “bolt-on” acquisitions separately, said Sierra Signorelli, CEO of commercial insurance at a media presentation in London on Tuesday.

Zurich has doubled its middle-market portfolio in the United States since 2020, with gross premium and the number of policies it issued growing, Ms. Signorelli said.

Pricing in the middle market is generally more stable, making it an attractive area for growth, she said.

Globally, the insurer has seen double-digit growth for middle-market business since 2021 in its seven largest markets, she said.

“We have a pretty significant market share in large corporate. We still see an opportunity to grow our share of the market in the middle market, taking some of our capabilities and making them relevant to the middle-market segment,” Ms. Signorelli said.

The company is also targeting the U.S. excess and surplus lines market for growth and other specialty areas, such as marine insurance, credit, cyber and construction, she said.

Insurance prices continue to rise, though there’s variation among lines, Ms. Signorelli said.

Property insurance prices are less volatile than in the past as reinsurers have increased attachment points for reinsurance coverage, and insurers have retained more risk, said Penny Seach, Zurich’s group chief underwriting officer.

“You see more price adequacy in the property market and that’s not expected to shift up and down. It will go down a little bit, it will go up a little bit, but, broadly, it’s expected to remain within a range,” she said.

Pricing for long-tail liability lines will likely be variable, including cyber liability, which is growing rapidly and underwriters are still learning about the risk, Ms. Seach said.

In the U.S., while property rate hikes are decelerating, excess liability and auto rates continue to accelerate as loss costs increase, Ms. Signorelli said.

“Workers compensation remains in a reasonably good place, and we see a little bit of downward trend on frequency there, which aligns with the rate trends that we see as well,” she said.