The increased deployment of Artificial Intelligence (AI) is set to lead to significant job cuts at the German subsidiary of Swiss insurer Zurich over the coming years. Speaking at the annual results press conference in Cologne on Tuesday, Germany CEO Carsten Schildknecht stated that within the next five years, 10% to 30% of tasks – ranging from underwriting and customer service to claims processing – would be handled by AI. “The end result will be fewer positions,” Schildknecht said. However, Zurich Germany expects to manage this transition through natural attrition as the “baby boomer” generation retires. “We wouldn’t even be able to fill those vacancies,” he added.
The adoption of AI in the insurance industry is seen as inevitable. “Those who sleep through the AI revolution will slowly but surely disappear from the market,” warned the Zurich Germany chief. For those who successfully navigate the transformation, the potential rewards include cost savings of up to 30% and above-average growth.
Last year, Zurich saw its operating profit in Germany surge by 61% to 554 million euros. This growth was primarily driven by the Property & Casualty (P&C) division, which returned to operating profitability with a combined ratio of 93.8% (compared to 104.4% in 2024). Gross written premiums in this segment grew by 11%, with two-thirds of that growth coming from new business, according to CFO Torsten Utecht. Overall, Zurich Germany’s premium volume reached 6.24 billion euros, up 6% year-on-year.
In the life insurance segment, where 70% of business is conducted through banking partnerships with Deutsche Bank and Postbank, new business declined and premiums remained stagnant. Zurich is focusing on unit-linked policies and occupational pension schemes but remains hesitant regarding a renewed attempt to sell its legacy portfolio of traditional life insurance policies in Germany. “We have not yet reached a final decision on how to proceed,” Utecht said. While the underlying reasons for the initial decision to sell the 700,000 policies with high interest rate guarantees remain unchanged, “the market environment has shifted. We are under no pressure to sell at any price,” Utecht noted.
CEO Carsten Schildknecht was more explicit: “We would expect a different valuation in any future process.” During the first attempt, Zurich could have expected proceeds of around half a billion euros. However, as interest rates rise, these interest guarantees place less of a burden on the insurer’s capital. The sale of the portfolio collapsed just over two years ago due to opposition from the financial regulator BaFin, which deemed the life insurance consolidator Viridium no longer trustworthy due to its ownership structure at the time. Since then, financial investor Cinven, which had fallen out of favor with regulators, has sold its stake to a consortium led by Allianz. Consequently, Viridium now believes its chances of securing the deal have improved.
(Report by Alexander Hübner, edited by Olaf Brenner. For inquiries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for corporate and markets).)