Allied Zurich, the insurance group, yesterday announced it is spend $1bn (£625m) on e-commerce in the next three years, as it beat analysts' forecasts with a 21.5 per cent rise in pre-tax operating profits to $5.34bn.
Rolf HÃ¼ppi, the chairman, said the group aimed to triple its customer base from the 35 million to 100 million using the internet. "Zurich has aligned its strategic direction, not only to play the current game well, but to play it better and to shape the future game," he said.
Zurich, which trades in the UK under the Eagle Star and Allied Dunbar brands, wants to be the portal of choice for a wide range of financial services across Europe, including banking as well as its more traditional general, life and long-term savings businesses.
Mr HÃ¼ppi stressed that the group will be making use of outside partners, yoking its own distribution power to suppliers who are able to offer better value. Zurich has set up 350 strategic business units to target specific customer groups.
The group's decision to involve other suppliers in developing its e-commerce business reflects a growing trend in the industry. AXA last month said it is planning to launch its own-brand portal, offering a range of best-of-breed products from a number of suppliers to its existing customers, while Legal & General, the life insurance group, has similar plans to offer specialist funds managed by outside firms on its site. Egg, Prudential's virtual arm, launched a mutual fund supermarket selling unit trusts managed by rival firms.
Analysts said they were encouraged by Zurich's bold embrace of e-commerce, and the fact that the benefits of the merger between the Swiss and UK groups were coming through faster than planned.
Mr HÃ¼ppi said the group had achieved annualised cost savings by the end of last year of $226m against a target of $500m by the end of next year. He said the group was on track for double-digit profit growth this coming year, despite the increased internet spending. Total premium income was up 5 per cent to $48bn. Return on equity was up to 14 per cent.
Zurich shares fell sharply in Switzerland yesterday, but analysts said this followed a good run in recent days. In London, Allied Zurich closed at 715p, up by 5p.Reuse content