Management has confirmed that it is exceeding its medium-term ambitions, which are due to expire at the end of the year. A share buyback program is launched.
Zurich Insurance improved its performance over the first six months of 2022, both in terms of premiums in the damage business and operational profitability. Management has confirmed that it is exceeding its medium-term ambitions, which are due to expire at the end of the year. A share buyback program is launched.
The group benefited during the period under review from a net gain of 850,000 private customers, as well as from an increase in prices for business customers. At the same time, costs related to the coronavirus pandemic have continued to decline. The strong appreciation of the dollar, on the other hand, had a negative effect on the operating and net result.
In the Property and Casualty (P&C) business, gross premiums rose 8% to $23.8 billion. The combined ratio – which measures the ratio between claims expenses as well as general expenses and premiums collected – improved by 2 points to 91.9%, the Zurich company said in a statement on Thursday.
Damage caused by natural disasters and bad weather was “significantly lower” than the previous year. The group managed to increase its premiums by 6%, mainly with business customers.
This good performance was however mitigated by a loss of 51 million dollars suffered by the group’s investment portfolio due to the volatility of the financial markets. Last year, these investments brought in 62 million.
The life insurance segment, on the other hand, saw its gross premiums fall by 6% to 13.7 billion. Payments related to Covid-19 fell to 26 million, against 137 million a year earlier.
Activities with the American partner Farmers Exchanges benefited from a surge in gross premiums of 15% to 13.5 billion dollars. The latter benefited in particular from the acquisition in April 2021 of the property and casualty activities of Metlife in the United States.
In terms of profitability, operating profit (BOP) soared by 25% to 3.39 billion dollars and net profit reached 2.20 billion, an increase of 1% compared to the first half of 2021.
On the way to new goals
These key figures are mixed compared to the forecasts of analysts interviewed by the AWP agency. While gross premiums in P&C insurance are almost in line with expectations, the combined ratio is better than the 92.1% expected on average by specialists. The operating result is clearly higher than the expected 3.17 billion, while the net profit misses the mark (2.51 billion expected).
Chief Executive Officer (CEO) Mario Greco said the group was “on track to exceed all three-year targets for the second time”, which will expire at the end of the year. The insurer aims in this context for a return on capital “greater than 14%” on the basis of operating profit (BOP).
On November 16, the group will hold its Investor Day, an opportunity to unveil its new three-year objectives. After freeing up funds with the sale of former life insurance activities, the insurer will launch a 1.8 billion franc share buyback program in the coming months.