Zurich creates commercial insurance unit in wider overhaul

Zurich Insurance Group AG named James Shea to head a new unit that will combine its global corporate and commercial businesses as part of a company-wide restructuring.

Shea, 50, joins from American International Group where he headed global financial lines, Zurich said in a statement Tuesday after Swiss markets closed. It also appointed Claudia Dill and Jack Howell, who oversee Latin America and Asia Pacific respectively, to its executive committee.

Thomas Huerlimann, who led the global corporate division for five years, is moving to special projects, reporting to Chief Executive Officer Mario Greco.

Greco, who took over in March, is reorganizing the company along geographical lines and streamlining management. He plans to present his strategy to investors in November. Zurich, one of the world's largest insurers with its North America operations based in Schaumburg, has said the overhaul will affect about 8,000 of its 55,000 employees.

It makes sense to combine the units and "also clears up the split of responsibilities on the board level," said Sami Taipalus, an analyst at Berenberg with a hold rating on Zurich.

Sylvia Gaeumann, a spokeswoman for the insurer, said the corporate and commercial businesses overlapped, sometimes causing them to compete for the same client. "We don't have a target for job cuts, but we assume that there will be synergies through simplification and eliminating redundancies," she said by telephone.

The company has been overhauling general insurance, its biggest unit, since discovering insufficient reserves last year, mainly for North American auto and construction liabilities. That contributed to a third-quarter loss that forced Zurich to abandon a high-profile takeover bid for RSA Insurance Group Plc and led to the resignation of then CEO Martin Senn. He committed suicide in May.