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updated: 3/15/2017 5:51 PM

Zurich NA CEO: employees are the key

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  • Video: An inside look at Zurich


When Zurich North America CEO Mike Foley held a town-hall meeting earlier this year, he wanted to meet personally with the 2,600 employees at the sleek new Schaumburg headquarters.

Amid the all-glass finish and crossbar sections of the building, Foley talked of the changes happening throughout the company. He answered questions from employees, many who offered suggestions on how to design parts of the headquarters before it was built.

Besides offering input on the design, employees helped with streamlining suggestions for parent company, Zurich Insurance Group, led by global CEO Mario Greco.

"Mario thought we should have a strategy built by Zurich for Zurich," said Foley, 54.

Just as Zurich North America moved its headquarters to the 11-story eye-catching building at Meacham Road and Interstate 90 on the former Motorola campus, the company made operational changes during the past year.

The company, that insures about 90 percent of the Fortune 500 companies, as well as many more in construction, agriculture, automobile sales and other industries, has exited some lines of insurance because of costs, and started some streamlining measures to help its parent company save more than $1.5 billion by 2019. While it reduces costs, Zurich North America aims to build stronger relationships with its employees and customers.

The best place to start, Foley believed, was to host town hall meetings with employees and answer questions about the changes. One such meeting was held in February at the Schaumburg headquarters. Others will be in coming months at offices in Atlanta, Georgia; New York; Overland Park, Kansas; San Francisco, California; and Toronto, Canada.

The major change affecting local employees happened last year when the company signed a 25-year lease and moved to the new campus, while bucking the current trend of suburban companies moving downtown. Zurich stayed put in Schaumburg, where it had long occupied two 20-story towers, because most of its workforce lives nearby.

"Schaumburg has been our home and we wanted to stay here," Foley said. "It was best to get a new building with room for growth," he said of the a $400 million project. Workers made suggestions on what they'd like to see in the building, infused with natural light, that would help them during their work days and keep them healthy. The crowdsourcing for ideas worked, Foley said.

Last September, the company cut the ribbon amid fanfare of the 783,800-square-foot building. The interior offers open work stations, while the rest includes energy efficient technology, rainwater that can be harvested and reused, accommodations for electric vehicles, and native landscaping with about 600 trees on 40 acres once utilized by Motorola.

Leaders in the village of Schaumburg also like the changes.

While Schaumburg officials would never have wished for Motorola Solutions to start reducing its footprint in the village, the space it created for Zurich's impressive new headquarters turned out to be the most positive example of unintended consequences, Mayor Al Larson said.

"It kind of belies the story peddled by people in Chicago that all the jobs are flooding to the city," he added. Not only did Zurich's leaders have a vision that included remaining in Schaumburg, but the employees themselves wanted to stay, Larson said.

With new technology, Foley said many workers can now work from home and that could free up more space at the building.

"Everyone works flex hours and often work from home one or two days a week," Foley said. "They evaluate whether they need to be in the office every day ... They can then take control of their careers, of their time and even how they work during the day."

Internal changes

Besides the physical move, there are other changes taking place, including the ongoing cost-cutting announced by parent company, Zurich Insurance Group. Last spring, Greco replaced Martin Senn, who had stepped down during a reorganization of the 140-year-old parent company based in Switzerland.

The restructuring began by asking many of its workers to be a part of the process. They submitted videos on why they should be selected and then provided their insights, Foley said.

In November, Zurich North America announced its reorganization involving the operations in the U.S. and Canada. The company also includes other units, such as Rural Community Insurance Agency Inc., a farm crop insurance provider.

Global CEO Greco, who promoted Foley to head operations in the United States and Canada, also selected other CEOs to head Europe, Latin America and Asia Pacific geographic regions.

"That gave the business a more geographic focus," Foley said.

Bringing together the expertise both here and in Canada allows Zurich to simplify its operations and customer interaction and how it deals with the insurance market.

Foley also named a chief administrative officer who would be responsible for strategic execution, human resources, communications, community investment and employee engagement. The CAO also will coordinate audit, risk and compliance.

In addition, Zurich North America dropped some insurance lines for long-haul trucking and passenger transport services as well as equipment breakdown for boilers and machinery.

Industry analysts say dropping the lines has been favorable and that Greco has a proven track record. He has started to restructure the company and plans to reduce costs of about $1.5 billion by late 2019, according to a report issued by Henry Heathfield, an equity analyst with Chicago-based Morningstar Inc.

"Yes, they exited some less profitable businesses last year, but at the moment, it is not having enough of an impact," Heathfield said. He thinks it is hard to make a quick turnaround because of the risks with certain clients and some long-term contracts that are still in place. Heathfield added that raising rates could be difficult at this time.

For now, Foley is working with the changes and will wait and see how the streamlining produces results.

"I believe CEOs need to be strategic and not change too frequently, especially with large scale operations," Foley said. Also using good intuition, solid facts and input from customers all can lead to a solid foundation, he said.

How customers feel about the company is key, Foley says. "After they experience their first loss, and they've gone through the system, what do they really value? If your call center isn't responsive, that's a problem. So having employee engagement is critical."

• Staff Writer Eric Peterson contributed to this report.