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David Sims

Zurich UK Life CEO David Sims studied a rather unlikely subject at university for someone who works in the insurance industry. His degree was in medieval and modern history but he says a lot can be learnt from the past, especially given the current economic climate.

“It gives you a context and an insight and shows that things do go in cycles,” he says.

Sims took an unconventional route into financial services. His first job was with Unilever working in brand management and Comfort fabric conditioner was one of the brands he looked after.

He then went into management consultancy for a number of years until he got a phone call from a headhunter about a job at Allied Dunbar and in 1993 he joined the firm as marketing communications director.

“In those days, financial services was quite significantly aloof from the rest of the industry and was not terribly customer-focused, I have to be honest. One of my roles as a consultant was to try and bring some of the fast-moving consumer goods and customer insight into the way in which financial services companies operated.”

One of Sims’ first jobs was to lead the Allied Dunbar There May Be Trouble Ahead ad ampaign, which featured the grim reaper and won numerous awards.

After a while on the marketing side, Sims moved to a general management role, becoming managing director of Zurich International Solutions in 2002. In 2004, he was appointed CEO of the UK life business.

He readily admits that Zurich had its problems in those days. “If you go back five years, the Zurich UK life business was not in the best shape in the world. It was a bit of a problem child. Over that five-year period, we have transformed that business so that it is no longer a problem child, it is an adult and it has got real strength and has a great opportunity to grow.”

Sims says making this transformation required Zurich to make significant changes to the business, including exiting certain sectors of the market, overhauling the product range and hiring new people.

Zurich sold off most of its annuity business and no longer operates in this market. It also closed the with-profits fund and now runs the business as a closed book. It office also revamped its protection insurance proposition and converted its Allied Dunbar tied sales-force into Openwork in 2005. Although Zurich still has a relationship with Openwork, it only holds a minority stake in the business and it is run entirely separately from the life office.

In addition, it outsourced its admin systems and processes to Capita and over 1,000 of its staff moved from Zurich to Capita as part of this process.

Sims is particularly pleased with the corporate pension business which he says has made “great strides” and entered the “premier league” of providers in this field. The firm has also recently launched into the corporate risk market.

A few years ago, Zurich completely restructured by combining Eagle Star, Allied Dunbar and Zurich to create a single life office.

Sims says: “That gives us a much more efficient capital structure. One of the key themes I think through this period is if you are not going to get fit and get efficient, you will not be strong enough to survive. The market environment that we are in at the moment means companies have to be very strong, they have to have rigorous financial discipline, a good solid balance sheet. In the previous five years, we were forced to put all of that rigorous discipline in and get ourselves fit.

“To be frank, we were not necessarily expecting the crisis that hit our world but what it has meant is that we have entered that environment in a relatively strong position.”

Sims says that when he became CEO in 2004, the business was very UK-focused and did not have a lot of interface with the global life office.

“With Mario Greco coming in about 18 months ago as the global life CEO, he set this new global life strategy which is about building a global life business, of which the UK is a very important part but it is a part of a global business rather than a separate business on its own. That is quite important for us because we generate significant strength from our parent in Switzerland.”

Sims thinks that life offices will survive the credit crisis if they stick to the basics.

“If you were to pontificate on some of the things that have caused some of the problems, they generally come when people have veered away from doing the basics properly. They have got seduced into areas which are not the basics. Getting your capital base right, making sure that your propositions are good for customers but also delivering shareholder value are the basics of running an insurance company. You can’t forget that and we need to keep doing it.”

Sims believes there are too many suppliers in the market and says there is likely to be further consolidation in the life sector.

With regard to the retail distribution review, although Sims says it will have an impact on the market, he believes the key drivers for change will be the economic climate and customer requirements.

“The RDR in many respects is reflecting and emphasising aspects that already exist in the environment we operate in. We have done things like factory-gate pricing well before it was suggested by the regulator. Good quality advisers have been improving their quality of advice. The FSA has a role to play but it is the industry’s responsibility to deliver an industry that is quality and fit for purpose.”

Although Zurich does not have a wrap platform as yet, Sims says he is watching this space very carefully.

Over the past nine months or so, Zurich has increased its distribution capability in the IFA market by increasing the number of broker consultants to 140 in January 2009 from 90 in May 2008.

Sims has just hired former Bankhall marketing and strategy director Richard Howells as head of the IFA division to further strengthen IFA relationships. He says: “We are in good shape. We see ourselves as now in a growth mode where we can take share in this marketplace.”

Born: February 18, 1958 in Gunness, Lincolnshire

Lives: Clevedon, Somerset

Education: BA in medieval & modern history from King’s College, London

Career: Zurich Financial Services – 1993-present; June 2004-present – CEO UK Life; 2002-04 – managing director, Zurich International Solutions (ZIS); 2000-02 – group marketing director (UKISA); 1997-2000 – UK Life marketing director; 1995-97 – marketing director, Allied Dunbar Assurance; 1993-95 – marketing communications director, Allied Dunbar Assurance; 1991-93 – managing consultant, Price Waterhouse Management Consultants; 1986-91 – consultant leading to senior manager, Deloitte Haskins & Sells Management Consultants; 1984-86 – marketing manager, Economics Laboratories Inc (USA); 1979-84 – UCMDS trainee leading to senior brands manager, Unilever – Lever Bros

Likes: Spontaneity and tip-top plans

Dislikes: Energy sappers

Drives: Mercedes

Book: The Curious Incident of the Dog in the Night- time by Mark Haddon

Film: Slumdog Millionaire

Album: Back to Black by Amy Winehouse

Career ambition: To put the customer closer to what we do in financial services

Life ambition: To go around Australia

If I wasn’t doing this I would be…Running a country house hotel with my wife in Somerset

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