Zurich Targets U.S. Owners For Insurance Expansion

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Zurich Targets U.S. Owners For Insurance Expansion

Zurich Insurance wants to expand its insurance offerings for U.S. middle market property owners, real estate investment trusts and property managers. The insurer has a 5% share of the real estate insurance market and hopes to grow this to 15% over the next five years, said Richard Elliott, global head of real estate.

The insurer is pitching a bundled package, including property, liability, workers compensation and environmental insurance. "There is a real gap in the market for this type of bundling," Elliott said. Other active players in this market include AIG and Chubb.

The Zurich-based company underwrites contracts for clients seeking coverage above the basics of property insurance, loss of rental income and owner liability. This includes coverage that extends into corporate needs, such as litigation protection for corporate officers. Many owners currently have to work with several insurance carriers in order to secure full coverage, Elliott added.

The insurer also provides coverage on international properties, aiming to bridge issues such as taxes, regulations and compliance. These issues vary from country to country. "International insurance programs create a lot of admin that investors want to avoid," Elliott said.

The overall financial stability of underlying insurers has become a major concern for property owners. "They're looking for insurers that are financially strong and stable," he said. Zurich has an AA- rating from Standard & Poor's.

Insurance rates have a cyclical nature, hitting their highs and lows within a roughly five-year cycle, Elliott said. Increased competition among insurers has driven down rates over the past few years, but Elliott believes that rates have bottomed and will begin to rise next year. Zurich targets the median pricing level throughout cycles. 

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