Global insurer Zurich has seen its property and casualty (P&C) gross written premiums (GWP) jump by 8% in the first-quarter of 2022, as the carrier announces an expected immaterial exposure to Russia’s invasion of Ukraine.
P&C GWP rose from $11 billion in Q1 2021 to more than $11.9 billion in Q1 2022, with growth in all geographies including 17% in both North America and Latin America.
The insurer says that growth in P&C premiums was supported by higher premiums rates, driven by the strong performance in numerous regions, notably the UK, Germany, and Switzerland. In commercial insurance, premium rates rose by 8%, and by 2% in retail insurance.
Despite ongoing inflationary pressures, Zurich still expects rates to exceed lost-cost trend well into 2023.
“The positive operating trends in the first quarter, together with the Group’s very strong balance sheet, give us confidence that we will successfully conclude the current strategic cycle later this year,” said George Quinn, Group Chief Financial Officer (CFO).
Within P&C and also its investment portfolio, Zurich has direct exposure to Russia and Ukraine, but has said today that it expects the impact to be immaterial.
“The war in Ukraine and the humanitarian crisis that it has triggered are almost beyond comprehension,” said Quinn. “The Group and the Zurich Foundation have provided financial and logistical support. We are especially proud of our colleagues who have opened their homes to families fleeing the war. Although the effects of the war are expected to lead to significant losses for the insurance industry, we do not expect insurance claims to be significant for the Group. In fact, the Group has made a strong start to the year and expects to exceed all financial targets for 2022.”
In the insurer’s life operation, new business annual premium equivalent (APE) increased by 14% on a like-for-like basis, with growth coming from higher sales in capital efficient savings and protection products.
The new business margin fell from 31.8% in Q1 2021 to 25.7% in Q1 2022, although Zurich says that this is still attractive, and also reflects the impact of a less favorable product mix within the firm’s preferred lines of business, and economic variances in Asia Pacific and Latin America.
The COVID-19 pandemic continued to have an impact on Zurich in Q1 2022, although to a much lesser extent than the previous year.
In the first-quarter of 2022, Zurich’s life business recorded $11 million of COVID-19 related claims, driven mostly by Asia Pacific and Latin America. This compares with COVID-19 related claims of $195 million in the full year 2021.
Finally, within farmers exchanges, which are owned by their policyholders, GWP increased by 29% in Q1 2022 to almost $6.9 billion. Zurich attributes the growth to a contribution of $900 million from the unit of MetLife acquired in Q2 2021, $400 million of higher volumes of commercial rideshare business, and continued improvement in most business lines.