A good transport system is essential, given that many of your potential
clients will expect you to come to them, argues Fosh. “The European model, which is how we run our Zurich office, centres on much more travelling around to meet the clients and, although the brokers are still involved, it is much more about going out with them to meet the client face to face. A lot of business comes to Zurich in that way,” he says.
Zurich originally began attracting many start-ups, due to the natural infrastructure of support systems already available. This led to a further attraction for more companies to move to Zurich and thus creating its hub status, argues Stephan Ruoff, chief executive of Tokio Millennium Re’s newly opened Zurich branch.
“Today, there are thousands of reinsurance experts present in the
agglomeration in Zurich with branch knowhow, expertise and language skills,” he says.
This point was noted by Swiss Re’s chairman, Walter Kielholz, at the company’s 2011 annual general meeting. He spoke of Switzerland’s “strong financial market supervision, internationally competitive
corporate tax rates and critical mass of competitors and service providers such as consultants, auditors and lawyers”.
But such rapid growth so quickly can have downsides. Some point out
that the recent rush of reinsurers looking to set up business in the city has meant that running costs, which were already comparatively high, have continued to rise.
“The more Zurich attracts new companies, the more likely their
personnel costs are to be pushed up,” says Robert Jones, senior credit analyst at Standard & Poor’s.
“In addition, the Swiss franc is very strong at present, which may affect
the relative competitiveness, so it depends on how the currency sits in the future. Zurich could become a victim of its own success if it continues to suck in new companies, which in turn will force costs up and negatively affect the competitiveness of the market.”
A major factor as to why costs are so high in Zurich is also attributable
to the relative strength of the Swiss franc in comparison with many other currencies. While the Swiss Bank has taken measures to mitigate the
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