A new strategic focus and corporate structure at Zurich North America Canada has lessened underwriting losses, but it still suffered a disastrous net loss of $93.4 million in 2002. However the “new” Zurich says disastrous results is a thing of the past.

Robert Landry, the President and CEO at Zurich Canada, says the reasons that led to the loss were limited to 2002, and therefore the company should turn a profit in 2003. “If we don’t, you won’t be talking to me next year,” he exclaims jokingly.

Mr. Landry explains that the majority of the net loss can be attributed to claims guarantees made to ING Canada. Zurich has received all the claims from that book of business, continues Mr. Landry, and so it does not anticipate any more claims from it going forward.

In November 2001, ING acquired Zurich’s personal and group property and casualty insurance operations. In exchange, Zurich took over the large (over $50 million per plan) commercial and corporate policies underwritten by both organizations.

“We are trying to create a non-competition environment in an uncertain market with ING,” says Mr. Landry.

“I can tell you we believe that we made the right decision a year ago,” declares Mr. Landry. “And the reason I say that is, we were having difficulty making money in the personal lines arena.”

Two other areas that hit Zurich were prior year claims in the commercial auto and liability segments and a weak investment environment, outlines Mr. Landry. However, Zurich and the industry in general, he claims, have returned to the fundamentals of sound underwriting and claims management.

For example, “We structured our claims department in a very specialized way so we know these kinds of (commercial) customers. We have a risk engineering department … that assists customers in understanding and managing their risks better,” emphasizes Mr. Landry.

“It’s a hard market,” says Mr. Landry, “we have to grow in areas where we believe we will be profitable. … Companies are no longer trying to be all things to all people.”

As for its expense ratio, which has been improving over the past few years, Mr. Landry expects the positive trend to continue because of the rate increases of 20% to 30% last year. “We also hope the capital and investment markets improve,” he says, “but no one has control over that.”

In addition, the insurer is not planning to take on any new large initiatives or IT expenditures.

In February 2002, three months after the ING transaction, Zurich announced the sale of its life insurance company, Zurich Life Insurance Company of Canada, to Manulife Financial. Zurich was trying to be and do too much before the ING deal, says Mr. Landry.

Mr. Landry, who took over from Barry Gilway as President and CEO in May 2002, explains that Zurich insures many of the largest corporations that operate in Canada.

“It’s impossible really, to compare the Zurich of today going back with the Zurich of a year ago or two years ago,” says Mr. Landry. “We are very much an entirely different, smaller company.”