Best insurance borrower: Zurich Financial Services
ZFS’s activist approach to the capital markets and the success of its unique turnaround story makes it insurance borrower of the year.
|ZFS has demonstrated a disciplined approach to the market, say banks
Zurich Financial Services has spent several years rebuilding profitability, sharpening its focus on core businesses and concentrating on its key markets. It had run into trouble around the turn of the century. In 2001, the insurer suffered earnings declines and losses. So, in 2002, ZFS needed to get itself back on an even keel. This was achieved via a $2.5 billion rights issue. The following year the insurer managed to return to profit and the transformation of the credit really got going. In addition, CEO James Schiro has been instrumental in rebuilding confidence in the group, working hard on executing the strategy of getting back to basics (“boring insurance company”) announced in 2002. To achieve this he reshuffled and changed his management team and focused on financial rigour and underwriting discipline.
The Switzerland-based insurer has been able to diversify its investor base while attracting recurring investments from some of the largest high quality institutional investors. Each transaction has been successful and oversubscribed.
Citigroup’s Leo Greve says: “ZFS has demonstrated that a disciplined approach to the markets, with well-prepared issues that find the right medium between a tightly priced transaction but with room for some after-market performance for investors, pays off.