Zurich Insurance Group has released its results for the first nine months of 2018, in which it estimates that losses related to Hurricane Michael in the fourth quarter are likely to be around US $175 million.
Category 4 Michael made landfall in the Florida Panhandle on October 10th as the strongest tropical cyclone on record to strike the region and the fourth strongest hurricane to make landfall on the U.S mainland.
Recent estimates from Aon’s Impact Forecasting suggest that economic losses resulting from Michael will exceed $15 billion, with re/insurers likely to incur losses of at least $8 billion.
Zurich’s anticipated $175 million loss compares with estimates of up to $550 million for Berkshire Hathaway, $500 million for AIG, and $120 million for Progressive.
The company also said that its weather and natural catastrophe losses for the first nine months were slightly higher than expected, although these were offset by strong growth in its life business and stable performance for property and casualty (P&C).
Zurich saw P&C rate increases of 3% over this period and gross written premiums growth of 2%, with promising results in Asia Pacific and Latin America partially offset by a 1% decline in North America as the company continues to focus on profitability.
In the Europe, Middle East & Africa (EMEA) region, gross written premiums increased by 5%, with growth in commercial business in Switzerland and Portugal offset by reductions in Germany and the UK.
In terms of life, Zurich’s new business annual premium equivalent (APE) volumes increased by 25% over the first nine months of 2018, with 6% growth in new business value on a like-for-like basis.
The Farmers Exchanges, which are owned by Zurich policyholders, also continued to deliver top-line growth, with gross written premiums up 4%, partially offset by the run-off of discontinued operations.
“We are pleased with the development of our businesses over the first nine months of the year and are on track to achieve our 2017-2019 financial targets,” said Zurich’s Group Chief Financial Officer George Quinn.
“Life continues to perform very strongly, while the Farmers Exchanges are seeing good momentum in key customer metrics and underlying profitability. In Property & Casualty we continue to focus on profitability over volumes in what remains a challenging environment,” Quinn continued.
“We have also continued to execute on our strategy with the announced acquisition of Adira Insurance in Indonesia and the integration of the acquired QBE businesses in Latin America.”
