Zurich Insurance Group has seen its profit drop in the first half of 2020 due to Covid-19-related claims and a drop in net investment return. With price increases in a major business segment, it isn't all doom and gloom though.
Zurich Insurance Group had net income of $1.2 billion in the first six months of 2020, which was 42 percent less than in the same period of 2019, according to a statement released on Thursday. Higher claims and a drop in the net investment return are the drivers of this development, the insurer said.
Zurich in May had published an estimate for Covid-19-claims for the full year. The company subsequently recorded the full amount of $750 million within the first-half results. Despite some uncertainty remaining due to the very nature of the pandemic, the company maintained the estimate given on May 14.
Price Increases
The return on its investments declined 22 percent from a year earlier, to $2.76 billion. The net investment return on group investments was 1.4 percent, down 0.5 percentage points.
The business of Zurich otherwise continued more-or-less as expected, the company said. Property and casualty premiums increased 2 percent to $18.9 billion and the insurer sees itself well positioned to benefit the price increases in commercial insurance. Gross written premiums (which make up about 70 percent of the P&C premiums) grew by 8 percent in the first half, driven by significant rate increases in North America and Europe.
Digital Strategy Implementation
The company also made a point of accelerating the implementation of its digital strategy, including a range of measures to support customers including video-based claims reporting, electronic signatures and remote risk assessments for businesses.
Zurich also set up the Wellcare unit, a technology-based business focused on health and wellbeing services aimed at prevention alongside traditional insurance protection.
