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Zurich Insurance continued to earn well in the first half

  • By The Swiss Times
  • 10 August 2023

With currency volatility, raising prices and inflation on the horizon. Zurich Insurances new strategy finds an increase in net incomes across the past year spurred by international relationships.

<strong>Zurich Insurance continued to earn well in the first half</strong>
Keystone/SDA©

The globally active Zurich Group made high profits in the first half of 2023, as it did a year ago. The insurance group is benefiting from further increases in tariffs, while natural catastrophes did not put too much strain on the bill. Zurich has been acting with caution in this business for some time.

In the first half of the year, the group seamlessly continued the good performance of the previous year, as the figures presented on Thursday show. They were first reported according to the new accounting principles (IFRS 17). The insurer more or less held operating profit at last year’s record $3.7 billion, while net income rose 6 percent to $2.5 billion.

“We got off to a very good start in the new strategy period,” said Zurich CEO Mario Greco at a conference call. The Group is aiming for a return on equity of 20 percent by 2025. In the first half of the year, this threshold was exceeded for the first time at 22.9 percent.

Risks under control

The guarantee for success is the good business in property and casualty insurance (P&C). While the division’s operating profit fell 6 percent, adjusting for currency fluctuations and the absence of a one-time gain last year would have increased 3 percent.

The numerous thunderstorm, flood and earthquake disasters around the world have hardly affected Zurich. The combined ratio only deteriorated by 1.3 percentage points to 92.9 percent, which is still clearly profitable. The further the value is below the 100 percent threshold, the more profitable the business is.

“We have deliberately reduced our risks in the catastrophe business in the past,” Greco explained in an interview with the AWP news agency. Data analyzes carried out with the help of artificial intelligence also help the Group to better understand natural hazards and to distribute the associated risks geographically well in its own books.

Higher prices

In the P&C business, Zurich also managed to further increase prices in view of the inflationary trend. Finally, inflation also drives up damage costs. In the first half of the year, Zurich raised premium rates by 6 percent, as in the whole of 2022.

Considered by segment, there were major differences. The prices in the US corporate customer business have been increased particularly strongly, said Greco. According to the Zurich boss, how prices will continue to develop also depends heavily on the further course of inflation.

Gross written premiums in the P&C division rose 8 percent to $24.6 billion. The Group intends to continue growing in the currently favorable market environment. Greco sees potential for this in business with small and medium-sized companies in the USA or in Europe.

In the smaller life insurance business, operating profit rose 11 percent to $0.9 billion. Growth in Europe, the Middle East and Africa (EMEA), North America and Latin America more than offset the decline in Asia. In business with US partner Farmers, Zurich increased earnings slightly to almost 1 billion.

Keystone/SDA©

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