From Zurich Insurance Company to Zurich Financial Services, 1955–2000

The multi-line insurer

In 1955 the company dropped the reference to accident and liability from its name and became Zurich Insurance Company, in German Zürich Versicherungs-Gesellschaft. The new name reflected the ambition to be a multi-line insurer offering all classes of non-life business from a single source.¹ The expansion into new territories continued with Casablanca in 1951, Australia in 1961, India in 1962, where the nationalisation of 1972 forced the company out again, and Argentina in 1965. In Switzerland Zurich introduced fire insurance only in 1970, a late entry that can be explained in part by the cantonal building insurance monopolies, which in most cantons reserve the fire insurance of buildings to a public institution.² The date itself is recorded in the company history.³

The 1960s also brought the first serious internal scandal. A subsidiary called Turegum, which operated through a London branch, grew its premium income from 3.9 million francs in 1960 to 246 million francs in 1967 by writing high-risk business on the fringes of the Lloyd’s market. An investigation led by Fritz Gerber in 1968 uncovered fraud.⁴ Gerber, a lawyer who went on to lead the company as chief executive and chairman, became the architect of Zurich’s growth in the following decades.

Under Gerber the company pursued a systematic acquisition strategy intended to cover all branches of insurance. It acquired the Swiss insurer Alpina in 1965, one of the first acquisitions of a listed Swiss company, and the German Agrippina group of Cologne, a marine insurer founded in 1844, in 1969. In 1982 it absorbed Altstadt Versicherungs-AG, which the American insurer Allstate had founded in 1959 as its first foreign operation. In 1991 it acquired control of La Genevoise, which brought a Geneva life and non-life insurer into the group.⁵ Between 1972 and 1990, the premiums of the parent company rose from 2.3 billion francs to 6.1 billion francs, while group premiums grew from 4 billion to 17.1 billion francs. By 1990 Zurich operated in some eighty countries.⁶

Serving the multinational corporation

For the theme of this chapter, the most important innovation of the Gerber years was organisational. In 1975 Gerber initiated the development of an international division to serve large corporate clients, which was founded the following year. With it Zurich became the first European insurer, and the second worldwide after AIG, to offer umbrella programmes covering the facilities of a multinational company around the world under a single coordinated structure. In 1978 the company founded its Risk Engineering unit, which analysed property, safety and liability exposures together and developed a method called Zurich Hazard Analysis. From 1984 Risk Engineering offered eight-week training courses for engineers, which included representatives of clients.⁷ The Historical Dictionary adds that active reinsurance became a third pillar of the business from 1976.⁸

The international programme is the defining product of industrial insurance to this day. A Swiss or German industrial group with plants in thirty countries cannot buy a single policy that is valid everywhere, because most countries require local risks to be insured by locally authorised insurers. The solution is a master policy issued to the parent company, usually in its home country, combined with local policies issued by the insurer’s own branches or network partners in each country, with a coordinated wording and a “difference in conditions” and “difference in limits” layer that fills the gaps between the local covers and the master policy. Premiums and claims are allocated among the entities of the group, often with a captive reinsurer in the middle. Zurich’s decision in 1976 to build this capability placed it among the small number of insurers able to lead programmes for the largest multinational companies, a position that still defines its commercial insurance business.

In 1980 Zurich acquired the Fidelity and Deposit Company of Maryland and founded Zurich Reinsurance Company of New York. Nine years later it took over the Maryland Casualty Group of Baltimore, then its largest acquisition, which doubled its premium income in the United States.⁹ In 1989 the group published consolidated financial statements for the first time.¹⁰

Rolf Hüppi and the leap into financial services

The man who took Zurich into its most ambitious phase was Rolf Hüppi. Born in 1943, he joined the company in 1963, worked in India until 1970, became regional manager in the United States by 1975 and then built up the international division from Zurich. He joined the executive board in 1983. Under Gerber’s patronage he became chief executive, joined the board in 1993 and took over the chairmanship two years later, combining the two offices in one person.¹¹

Hüppi’s strategy aimed at concentrating on selected market segments while shedding peripheral businesses. A partnership with Swiss Bank Corporation in 1992 strengthened the life business in Switzerland. The decisive moves, however, were made in the United States and in asset management. In 1996 Zurich paid about two billion dollars for 80 per cent of the Kemper Corporation, a Chicago-based life insurer, and 97 per cent of its fund management arm, Kemper Financial Services, which managed some 42 billion dollars in mutual fund assets. In 1997 it acquired a majority of the New York asset manager Scudder, Stevens & Clark for a similar sum, adding around 120 billion dollars of assets under management. The two fund businesses were merged into Scudder Kemper Investments, later renamed Zurich Scudder Investments.¹²

The merger with B.A.T’s financial services, 1998

The largest transaction followed in 1998. The British tobacco group B.A.T Industries had built up a substantial financial services business during the 1980s. Its centrepiece in the United States was Farmers Group, the Los Angeles-based management company of a large network of policyholder-owned motor and home insurers. B.A.T had acquired Farmers in a hostile takeover launched in 1988, after the Farmers board rejected a first proposal of 60 dollars per share. The tender offer of 3 March 1988 offered 63 dollars per share and valued the company at about 4.5 billion dollars.¹³ In the United Kingdom, B.A.T’s financial services included the composite insurer Eagle Star, the life and pensions provider Allied Dunbar and the asset manager Threadneedle.

The combination of Zurich with B.A.T’s financial services, known as British American Financial Services, was presented as a 38 billion dollar transaction. It produced Zurich Financial Services, initially under a dual holding structure: 55 per cent of the group was owned by Zurich Allied AG, listed on the Swiss exchange, and 45 per cent by Allied Zurich p.l.c., listed in London. Combined gross premiums rose from 23.7 billion to 40 billion dollars, which made the group the fifth largest insurer in the world, and assets under management grew to 341.8 billion dollars. In October 2000 the dual structure was unified under a single Swiss holding company with its primary listing on the Swiss exchange and a secondary listing in London.¹⁴ According to the company, the number of employees doubled from 30,000 to 60,000 with the merger.¹⁵ The Historical Dictionary gives a snapshot of the group in 1998: about 69,000 employees, gross premiums of 45 billion dollars and 415 billion dollars of assets under management, which made it one of the largest insurance and asset management companies in the world.¹⁶

The merger also brought Farmers into the Zurich group, the most durable result of the transaction. The legal structure through which Zurich participates in the Farmers business is unusual and is discussed in section VIII below. Contemporary observers called Hüppi “BAT-Man”, and at the end of the decade he was the darling of the financial community.¹⁷

Notes

1. Zurich Insurance Group, “History and Heritage”, entry for 1955, https://www.zurich.com/about-us/history-and-heritage. ↩
2. Schweizerischer Versicherungsverband (SVV), “Affordable natural perils insurance thanks to the ES pool”, https://www.svv.ch/en/insurance/property-and-casualty-insurance/natural-perils-insurance/affordable-natural-perils, which states that private insurers cover buildings only in the seven cantons of Geneva, Uri, Schwyz, Ticino, Appenzell Innerrhoden, Valais and Obwalden (GUSTAVO). In the other nineteen cantons buildings are insured by a cantonal public insurer. The connection with Zurich’s late entry is the author’s interpretation. ↩
3. “Zurich Financial Services”, International Directory of Company Histories, via Encyclopedia.com, https://www.encyclopedia.com/books/politics-and-business-magazines/zurich-financial-services. ↩
4. Zurich Insurance Group, “History and Heritage”, entry for 1962 (Turegum), https://www.zurich.com/about-us/history-and-heritage. ↩
5. Zurich Switzerland, “History of Zurich”, https://www.zurich.ch/en/about-us/zurich-at-a-glance/history, entries for 1965, 1982, 1991 and 2006. Details on Agrippina and Altstadt from Zurich Insurance Group, “History and Heritage”, https://www.zurich.com/about-us/history-and-heritage. ↩
6. “Zurich Financial Services”, International Directory of Company Histories, via Encyclopedia.com, https://www.encyclopedia.com/books/politics-and-business-magazines/zurich-financial-services. ↩
7. Zurich Insurance Group, “History and Heritage”, entries for 1975, 1976, 1978 and 1984, https://www.zurich.com/about-us/history-and-heritage. The international division is described there as the forerunner of the later Global Corporate business. ↩
8. Elena Folini, “Zürich Versicherungen”, HLS, https://hls-dhs-dss.ch/de/articles/041840/. ↩
9. “Zurich Financial Services”, International Directory of Company Histories, via Encyclopedia.com, https://www.encyclopedia.com/books/politics-and-business-magazines/zurich-financial-services. For the 1980 transactions see Zurich Insurance Group, “History and Heritage”, https://www.zurich.com/about-us/history-and-heritage. ↩
10. Zurich Insurance Group, “History and Heritage”, entry for 1989, https://www.zurich.com/about-us/history-and-heritage. ↩
11. swissinfo.ch, “Porträt des einstigen Superstars Rolf Hüppi”, 19 April 2002, https://www.swissinfo.ch/ger/finanzplatz-schweiz/portraet-des-einstigen-superstars-rolf-hueppi/2665180. The portrait dates Hüppi’s appointment as chief executive to 1988. The International Directory of Company Histories gives 1991 for his appointment as president and chief executive: “Zurich Financial Services”, via Encyclopedia.com, https://www.encyclopedia.com/books/politics-and-business-magazines/zurich-financial-services. ↩
12. “Zurich Financial Services”, International Directory of Company Histories, via Encyclopedia.com, https://www.encyclopedia.com/books/politics-and-business-magazines/zurich-financial-services. The company’s timeline describes the Scudder purchase as its first purely financial, non-insurance acquisition and records the foundation of Zurich Capital Markets in 1996: Zurich Insurance Group, “History and Heritage”, entries for 1996 and 1997, https://www.zurich.com/about-us/history-and-heritage. ↩
13. UPI Archives, “B.A.T. makes $63 hostile bid for Farmers Group”, 3 March 1988, https://www.upi.com/Archives/1988/03/03/BAT-makes-63-hostile-bid-for-Farmers-Group/7631573368400/. The final terms of the acquisition are not stated in that report. ↩
14. “Zurich Financial Services”, International Directory of Company Histories, via Encyclopedia.com, https://www.encyclopedia.com/books/politics-and-business-magazines/zurich-financial-services. ↩
15. Zurich Insurance Group, “History and Heritage”, entry for 1998, https://www.zurich.com/about-us/history-and-heritage. ↩
16. Folini, “Zürich Versicherungen”, HLS, https://hls-dhs-dss.ch/de/articles/041840/. ↩
17. swissinfo.ch, “Porträt des einstigen Superstars Rolf Hüppi”, 19 April 2002, https://www.swissinfo.ch/ger/finanzplatz-schweiz/portraet-des-einstigen-superstars-rolf-hueppi/2665180. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.