Zurich Financial Services AG said it has created a unit to sell insurance to companies that have undergone a merger or acquisition, a market the Swiss company estimates is worth $10 billion a year in premiums.
The unit, which Zurich said Wednesday is the first of its kind in the industry, commences operations amid record global M&A activity. Corporate transactions worth $3.1 trillion have been announced so far this year, after M&A activity set a record of $4 trillion in 2006.
Zurich's move reflects insurers' increased efforts to tap into fresh markets in search of premium growth, which has stalled in the United States and Europe and has not yet been compensated for by forays into markets such as China and India.
The unit, which is expected to have about 40 employees by yearend in cities such as New York, London, and Zurich, is to include several M&A specialists who have brokerage or private-equity background.
"With the creation of the unit, Zurich is the only insurer to offer a fully integrated and fully dedicated team of professionals with expertise in a broad range of insurance products and all aspects of the M&A process," Mario Vitale, the CEO of Zurich's North American global corporate division, said in a press release.
Thomas L. Gamble, who was named president of the M&A unit, said the recent takeover wave by private-equity firms made it apparent that financial players often have different insurance needs and risk appetites than the companies they are buying.
Thus, many financial companies are changing their insurance contracts or requiring additional policies.
Zurich said it wants to capitalize by being able to help companies find quick solutions for insurance issues.
