Zurich Insurance started its new three-year business cycle from a position of strength as its operating profit matched record levels while achieving its highest-ever return on equity.
By achieving a Group operating profit of $3.7 billion in the first half of the year, Zurich matched the record performance of the first half of last year. At the same time, it reported its highest-ever return on equity of 22.9 percent, according to first-half results released Thursday.
Net income after tax attributable to shareholders (NIAS) increased 6 percent to $2.5 billion compared with the prior-year period, mainly due to a more favorable net impact from capital gains and losses. NIAS also included $100 million of costs incurred related to the repurposing of some of Zurich’s real estate portfolio for its use.
«Zurich has made a strong start to the new financial cycle. We have high expectations for the Group’s performance and we set targets accordingly,» said Group CEO Mario Greco, adding that goals for the 2023-2025 business cycle «are our most ambitious yet, but our agility, flexibility and focus on delivering results make me confident that we will achieve them.»
Core Business Performance
In its core property and casualty insurance (P&C) business, operating profit was about 6 percent lower at $2.2 billion, although profit margins increased in personal and commercial lines of business. The combined ratio deteriorated slightly by 1.3 percentage points to 92.9 percent.
Still, P&C premium growth was 10 percent, while new business in life insurance increased by 17 percent, and Life operating profit increased by 11 percent to $900 million. Operating profit in the US Farmers business was $1 billion.
Capital position
As of the end of June, Zurich’s Swiss Solvency Test (SST) ratio was estimated at 263 percent, well more than the Group’s target of at least 160 percent, its slightly lower than the 267 percent at the end of January and was driven by a modest negative impact from model and assumption updates.
