AM Best has upgraded the Issuer Credit Ratings of Zurich Insurance Group and its core subsidiaries, highlighting the firm’s robust balance sheet, strong operating performance, and very favourable business profile as key factors driving the decision.
Namely, AM Best has upgraded the Long-Term Issuer Credit Ratings (Long-Term ICR) to “aa” (Superior) from “aa-” (Superior) and affirmed the Financial Strength Ratings (FSR) of A+ (Superior) of the main rated insurance subsidiaries of Zurich Insurance Group.
At the same time, the rating agency has upgraded the Long-Term ICR to “a+” (Excellent) from “a” (Excellent) of Zurich, a non-operating holding company.
The outlook of the Long-Term ICR has been revised to stable from positive, whilst the outlook of the FSR is stable.
“The upgrades for the Long-Term ICRs reflect the continued resilience of the group’s balance sheet strength, underpinned by excellent financial flexibility, and strong operating returns from its diverse profit centres,” AM Best explained.
Zurich’s pricing actions, risk selection and natural catastrophe exposure management over the past several years have reportedly led to an improved and less volatile performance of its property/casualty portfolio.
Meanwhile, Zurich’s life operations and fee business are said to provide solid additional earning streams, supporting robust internal capital generation.
AM Best added, “Zurich’s balance sheet strength is underpinned by risk-adjusted capitalisation, which is at the strongest level.
“The assessment considers Zurich’s consolidated financial leverage, which is expected to remain stable over the coming years, together with the group’s strong capital management capability, excellent financial flexibility, and solid regulatory solvency position.”
In its financial results for the first nine months of 2024, Zurich reported a “robust performance” as gross written premiums in its P&C segment rose 4% and insurance revenue was up 6% with rate increases of 5% year-on-year.
