Switzerland-based Zurich Financial Services has announced that it will provide transactional and administrative support services to its Farmers, North America Commercial and other North American units, through a newly-created shared services operating unit.
The new arm will be called ZFUS, and will be a subsidiary of Zurich Holding Company of America.
ZFUS will be comprised of two new entities, Farmers Services LLC and Zurich North America Services LLC. The gradual development of the two new groups is anticipated to eventually form a single shared services organization serving all of Zurich’s operations in North America. The new organization is expected to cater for the IT, human resources, accounting, finance, procurement, real estate, audit, communications and Farmers’ ServicePoint/Service Centers sectors.
ZFUS will be lead by Farmers CEO Paul Hopkins, working closely with Axel Lehmann, CEO of North America Commercial (NAC). Farmers’ employees will be transferred to the new entity, Farmers Services, effective January 1, 2007, followed by certain NAC employees, who are expected to transfer to the Zurich North America Services unit from mid-2007.
The formation of ZFUS is expected to facilitate and accelerate operating efficiencies, in particular focusing on areas such as procurement and human resources, as well as other sectors estimated to be worth up to $300 million by 2010.
As part of our ongoing operational improvement program, NAC and Farmers have been collaborating closely to identify opportunities to capitalize on their combined size, knowledge, financial, IT and tax efficiencies to enhance overall operational excellence, said Zurich’s CEO James Schiro. They have already achieved excellent results, but this new structure will assist them in developing additional centers of excellence and in further leveraging productivity through economies of scale and other efficiencies.