Zurich Insurance Group is facing a regulatory crackdown in Switzerland after the financial market supervisory authority, FINMA, launched an investigation into the company’s internal controls and sales practices regarding corporate life and pension policies, according to Swiss newspaper Blick and statements from group leadership.
FINMA Investigation and Sales Restrictions
The regulatory scrutiny centers on La Vita Collective Foundation, a semi-autonomous collective foundation in the Swiss occupational pensions sector. The foundation operates in partnership with Zurich Insurance Group to serve more than 24,500 affiliated companies and over 22 billion Swiss francs in assets. While the foundation manages investments, Zurich provides risk insurance coverage and administrative services. According to Bloomberg, the core issue involves policies sold to Swiss corporate clients at prices lower than the benchmark figures agreed upon with FINMA.
Leadership Shakeup and Internal Firings
According to Zurich Group CEO Mario Greco, speaking in an interview with Bloomberg, the company failed to catch the pricing discrepancies despite existing audit procedures. Greco confirmed that Zurich has fired 12 employees in connection with the control failures. The regulatory probe and compliance breakdowns have already triggered a broader overhaul of Zurich’s Swiss operations. In March, the head of Zurich’s Switzerland division, Juan Beer, exited his role and was replaced by Urs Luthy, according to reports by Swiss media.
Financial Impact and External Audits
Despite the enforcement actions and the ongoing sales suspension for new clients in the affected division, Zurich leadership maintains that the business disruption will not hurt overall corporate earnings. According to CEO Mario Greco, the targeted Swiss unit generates annual profits of approximately 20 million Swiss francs (24,4 million of dollars), rendering the sales ban financially immaterial to the wider group. On the markets, Zurich shares remained stable at 623.6 Swiss francs following the disclosures, as investors focused on the company’s ongoing integration of British insurer Beazley, which Zurich acquired for 11 billion dollars. To address the compliance failures, FINMA appointed consulting firm Deloitte as an independent external investigator, while Zurich retained the Homburger law firm to manage its legal interests, according to reports verified by Swiss financial press.
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