Zurich Financial Services Group can count itself lucky that it took its punishment early when it lost money in the credit markets a few years ago. The lessons learned have given the underwriter a comfortable vantage point from which to watch the current carnage and take its pick of low-priced businesses to add to its global network. 'Part of the difficulty we had in 2001-2002 was that we were in credit-enhancement type of transactions, such as credit wraps and CDOs [collateralised debt obligations], and we took substantial write-downs,' said company chief executive James Schiro, who was hired in 2002 to mop up the mess. Mr Schiro cut thousands of jobs and billions of dollars worth of sideline businesses to restore Zurich Financial back to health. In the latest credit crunch, the firm was on high ground and in expansion mode. 'It's not an accident that we didn't have subprime exposure or that we had limited CDO exposure this time,' he said. 'We've entered a period when we can grow, but the main focus is to grow profitably. We'll pick the markets we want to grow in.' Zurich Financial, Switzerland's largest insurance underwriter, is buying companies in emerging markets and branching out as other financial firms consolidate in an attempt to stay afloat. 'We're looking at Asia, Latin America, Central and Eastern Europe and Russia,' said Mr Schiro, formerly the chief executive of accounting firm PricewaterhouseCoopers. 'We see a lot of potential for general insurance here, principally because of the need and the fact that this is a market that is under-insured from a general insurance side, particularly in China.' Royal Bank of Scotland Group is expected to sell its insurance unit to raise capital after losing money in the credit crisis. Zurich Financial has been on the list of rumoured buyers of the unit, valued at about #8 billion (HK$123.7 billion), but Mr Schiro is non-committal on his company's bidding. 'If it fits our business and fits our model and we can achieve the goals and earning rates that we have, we're interested.' The company last year bought a 24.5 per cent stake in Beijing-based Best Harmonious Insurance Brokers, which it renamed Zurich Insurance Brokers. It also owns a 20 per cent interest in New China Life, the mainland's fourth largest life insurer. Last month, Zurich Financial announced that it was buying half of Spanish bank Caixa Sabadell's insurance business for US$500 million. 'There is still liquidity and capital out there and I think you will see increasing buying opportunities as we go forward,' he said. Few people or businesses on the mainland have insurance, leaving the market wide open for expansion. 'When you look at last winter's snowstorm, you'll notice that only about 5 per cent of the losses were covered by insurance,' Mr Schiro said. In contrast, insurance money has played a big role in rebuilding after big disasters in other markets, such as Hurricane Katrina in Louisiana and last year's flooding in Britain. Zurich Financial has opened a telemarketing office in Beijing manned by 200 salespeople as well as sales offices in Beijing and Shanghai as it introduces a direct sales strategy. 'We'll sell not just Zurich or New China Life products, but other insurers in this market.' He said Zurich Financial was helping New China Life to expand into general insurance, including vehicle coverage. However, the profit margin is low in that segment, even though the business is growing. So far, it has launched a new motor insurance product for hybrid cars in the United States, as their owners tend to be safer drivers than average. Zurich Financial is also trying to find business opportunities in climate change. In January, it hired former British prime minister Tony Blair as an adviser. 'Climate change really does impact our business, and will continue to do so in the future,' Mr Schiro said. The company is also looking at insurance products related to building construction materials and studying coverage for the carbon-credit market to ensure that developers get the amount of credits they anticipate when the project begins.