Swiss insurer Zurich Financial Services Group, a serial acquirer in recent years, is not letting tighter credit markets hamper its pursuit of acquisitions, a company executive said on December 22. "Zurich is definitely in a position where it can consider acquisitions," Mario Vitale, chief executive of Zurich Global Corporate, said in an interview.
Its eagerness to do deals sets Zurich apart from some competitors that have had to tighten their purse strings after large investment losses and could find it tough to raise funds in debt and equity markets strained by the credit crisis.
Zurich is holding its capital more closely, last month saying it would suspend its stock buyback plan. But while its profit fell in the latest quarter, the company has remained in the black, in contrast to the losses posted by numerous peers that include ING of the Netherlands and Allianz AG of Germany.
That may prove advantageous for Zurich if it is able to use its cash to snap up assets at bargain prices. Giant insurer American International Group Inc reached a deal to sell a unit, HSB Group, to Munich Re Group for nearly 40 percent less than the $1.2 billion it paid for the business in 2000.
Zurich, the fourth-largest European insurer, says it is on the lookout for deals that will bolster its North American personal lines and global life insurance businesses.
Several operations that may fall into those categories are for sale by AIG, which has been forced to shed assets to repay part of a US government bailout that has grown to $152 billion. AIG is expected to shortly reach a deal to sell its US personal lines business. It is also selling off large parts of its global life insurance operations.
Vitale would not say whether AIG assets were among those being pored over by an internal team dedicated to assessing acquisitions. "We won't comment on any specific companies with 'For Sale' signs," he said.
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