Zurich sets records in the first half of the year
Published: Thursday, Aug 8th 2024, 11:50
Updated At: Friday, Aug 9th 2024, 02:00
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The Zurich Group is growing and making a profit. The insurer achieved record results in the first half of 2024 and intends to grow profitably in the future. In the current uncertain stock market environment, however, investors are putting profits to bed.
Operating profit increased by a good 7 percent to a record USD 3.99 billion in the first half of the year, as Zurich announced on Thursday. Net income even climbed by a fifth to 3.03 billion. Profits generated on equities and other investments drove the result upwards.
Higher storm costs
But Zurich's operating business is also doing well: in the important property and casualty insurance (P&C) segment, sales rose by 6 percent to 21.4 billion dollars, thanks in part to further price increases. With an operating profit of 2.22 billion, the Group defended the high level of the previous year.
This was achieved despite the high impact of severe weather catastrophes such as the storm fronts in the USA and the floods in Europe. These had a severe impact on the account, with the result that the combined ratio, which is decisive for operating profitability, deteriorated by 0.7 percentage points to 93.6%.
Records in the life business and with Farmers
Zurich made progress in the smaller life business, where operating profit climbed 12 percent to a record 1.05 billion dollars. Higher fee income, increased investment income and positive developments in markets such as Switzerland, the UK and Italy filled the coffers.
Investment-linked products are playing an increasingly important role in the portfolio. In new business, premium income from these products climbed by almost a quarter and those in the pension protection segment rose by almost a fifth.
In the USA, meanwhile, Zurich has been cooperating with Farmers Exchanges for years. Records were also broken there. Farmers increased its gross premiums by 5 percent and significantly improved its combined ratio. In turn, Zurich posted its highest ever operating profit of 1.1 billion dollars on the services provided for Farmers.
On track with 2025 targets
Zurich delivered an "outstanding performance" in all business areas, said Group CEO Mario Greco with satisfaction. Market conditions continue to be better than expected and there are many opportunities to expand the business profitably. The CEO does not expect a recession in the USA for the time being.
In the long term, Zurich is also focusing on the Indian market, where the Group has positioned itself for future growth with an acquisition. And in the travel insurance business, the Group has become one of the world's largest providers with the acquisition of AIG Travel.
First and foremost, however, the existing business is to be expanded organically. At the same time, the Group believes it is on course to exceed the targets set for 2025. In any case, the return on equity calculated on the basis of operating profit was 25 percent in the first half of the year, well above the target of 20 percent.
Share under pressure
Despite good results that exceeded expectations, the Zurich share price fell by 2 percent late Thursday morning. The major uncertainties on the stock market are not stopping at Zurich. However, the shares are still up more than 2 percent since the beginning of the year.
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