The the highly anticipated 2013 Fortune Global Forum was open on June 6 in Chengdu and many of the world political and business leaders gathered in Chengdu to discussed the business topics in relate to the 2013 theme “China’s New Future”. NBD reporter yesterday (June 5) interviewed with Asia Pacific Property Insurance of Zurich Insurance, CEO, Chen Zhihong.
NBD: In the first quarter of this year, net profit of Zurich Insurance was $ 1.06 billion, though slightly lower than expected but it was still very good. What reasons are behind the success of Zurich Insurance?
Chen Zhihong: Zurich Insurance Group as a transnational, global insurance company, with exposure spread in more than 180 countries and regions; from a business point of view, our business mainly come from North America and Europe as well as several other emerging markets, including China, Latin the Americas. The company’s financial results in the first quarter were relatively good reflecting sound business philosophy. Insurance companies shall rely on underwriting profits to continue to grow and thus companies’ financial conditions must be much consolidated. From the annual report, it can be seen that our company’s capital adequacy ratio and the net asset value and market value are very stable.
In addition to underwriting profit, another large gain is from investment income, Zurich Insurance Group’s investment strategy is very conservative, most of the company’s investment is used to invest in government bonds and highly rated corporate bonds, the company wants very stable returns.
NBD: What do you think is the reason for the company to survive the 2008 global financial crisis?
Chen Zhihong: The problems in 2008 in insurance industry or other industries did not come from the main business, either AIG or some other investment banks; the problem came from the wrong investment in the derivative investment products which Zurich Insurance as a hundred-year old firm will not get involved.