Global insurer Zurich has reported an increase in property and casualty (P&C) operating profit of 46% and its lowest P&C combined ratio of the past decade, of 95.1%, in the first-half of 2019.
Overall, Zurich has reported business operating profit of $2.8 billion for the first-half of the year, an increase of 16% on the same period in 2018. After-tax net income increased by 14% from $1.79 billion in H1 2018 to $2.04 billion in H1 2019.
Zurich attributes the growth in profits to strong growth across the business and also an impressive underwriting result in its P&C segment.
The P&C segment recorded gross written premiums (GWP) of $18.6 billion in H1 2019, while the unit’s business operating profit increased by a huge 46% to $1.7 billion, which resulted in an improvement in the combined ratio from 97.5% in H1 2018 to 95.1% in H1 2019.
Zurich notes that this is the lowest combined ratio its P&C segment has achieved over the last ten years, adding that the effectiveness of underwriting actions it has taken over recent years, as well as efforts to lower expenses, has resulted in an improvement, most notably in commercial insurance.
The lower combined ratio was also helped by a reduction in the underlying accident year loss ratio excluding nat cats of 2.7 percentage points, a 0.6% reduction in other underwriting expense ratio and lower nat cat losses.
Group Chief Executive Officer (CEO), Mario Greco, said: “In 2016 we gave ourselves ambitious targets and we launched a bold new strategy. Today, we are proud to report that we are set to exceed all our targets and that the strategy is proving successful.
“Over the last three years, we have made substantial improvements in our business mix, reduced volatility and improved the profitability of our Property & Casualty portfolios while further growing our Life franchise through targeted acquisitions. We entered new and innovative markets, for example, through our acquisition of travel assistance provider Cover-More, and launched products aimed at millennials such as Klinc, an on-demand insurance proposition introduced in Spain, and ToggleSM, a rental insurance launched by Farmers Exchanges1 which is being rolled out in the U.S. We also succeeded in reducing our expenditures.
“Our management structure has been strengthened and reinforced by a diverse and highly qualified leadership team. Meanwhile, customer and employee satisfaction has improved.
“In the first half, a number of new distribution agreements have given more than 10 million additional customers worldwide access to our wide range of innovative products and services.”
In Zurich’s Life segment, GWP increased by 7% to $18.1 billion, while the Life business operating profit fell by 8% to $701 million.
“Based on what we have achieved, we can look to the future with confidence and optimism as we prepare to present our plans for the next three years at our Investor Day in London in November,” said Greco.
