Record profitability for Zurich Insurance

A Zurich Insurance building.

Swiss insurer Zurich Insurance reported record profitability in its property and casualty insurance business in the first half, driven by commercial, agricultural crop and travel insurance contracts.

Its combined ratio, the reference indicator for assessing the profitability of insurers, stood at 91.9%, the best level “never achieved” in damage insurance, he said in a press release on Thursday. The decrease in claims for compensation linked to Covid-19 made it possible to offset the slightly higher than expected costs for natural disasters, but nevertheless less marked than in the first half of 2021, he explains.

Its non-life insurance premiums rose by 13% excluding currency effects, and by 8% once converted into dollars, to nearly 23.8 billion dollars (23 billion euros), under the effect of the demand for crop insurance as agricultural commodity prices have risen sharply since the invasion of Ukraine. With the easing of health restrictions, the insurer also benefited from the recovery in demand for travel insurance in Asia-Pacific where its activities in this segment are focused on Australia.

“What we are seeing is that post-Covid travel protection products are being purchased much more often than before because travelers are more aware that they need to cover this”, explained Mario Greco, its general manager, during a press conference in Zurich. The same phenomenon has been observed in the United States, where demand has picked up “very quickly”said the boss of Zurich Insurance, vacationers being more in demand for travel insurance products before packing their bags since the shock of the pandemic.

Its life insurance activities have benefited from the decline in mortality linked to Covid-19 in Europe. Compensation costs for the Europe Middle East and Africa zone were limited to $26 million, compared to $137 million in the first half of 2021. In the first half, the insurer reported a 25% jump in operating profit , to nearly 3.4 billion dollars, its best level since 2008. Its net profit increased by 1%, to 2.2 billion dollars despite the tremors on the financial markets, underlines the ‘insurer.

The group said “right way” to exceed its three-year objectives which run until the end of the year. For the period from 2020 to 2022, he notably intended to grow his earnings per share by at least 5% per year. The insurer must take stock of its objectives for the next three years during a day for investors in November.

“These results are (very) good, but that’s what we could expect”, reacted Simon Foessmmeier, analyst at Vontobel, in a stock market commentary, while the group had already published solid figures in the first quarter. Arrived at the controls in 2016, Mr. Greco, the former boss of the Italian insurer Generali, had launched a major repositioning of Zurich Insurance towards less capital-intensive and more profitable activities, including travel insurance.

At the end of June, the insurer signed an agreement with the German insurance portfolio manager Viridium to sell it life insurance activities in Germany. The group will immediately launch a new buyback program of 1.8 billion Swiss francs (1.8 billion euros), he announced when the results were published.

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