Global re/insurance giant Zurich has announced that its reinsurance program has notable changes on the aggregate side of its protection.
The global catastrophe aggregate reinsurance treaty, which for 2022 now attaches for Zurich after a US $900 million retention.
This will end up being $100 million higher than the 2021 aggregate retention, which will leave Zurich more exposed to catastrophe losses through the coming year, according to analysts.
On top of raising its retention, the re/insurer has also changed its co-participation in the aggregate reinsurance protection it has in-force for 2022.
For 2021, Zurich had a 10% co-participation on both a US $250 million global aggregate catastrophe reinsurance treaty and a US $200 million combined global aggregate and occurrence treaty.
For 2022, the co-participation on the $250 million global aggregate cat treaty now stands at a much higher 42.75%, while the co-participation for the $200 million combined agg/occ treaty is at 35.25%.
Again, this implies more chance of Zurich retaining catastrophe and severe weather losses in 2022.
The final change to the aggregate reinsurance side is that Zurich had a franchise deductible in place for 2021, so that losses of US $45 million or greater could count towards the erosion of the aggregate retention during the year.
Zurich has purchased its aggregate reinsurance with a fixed occurrence deductible of US $35 million for this year.
Group Chief Executive Officer Mario Greco commented: “Zurich has delivered the strongest performance in a long time, demonstrating the strength of our franchise, the quality and commitment of our people, and the benefits of repositioning the business in recent years.
“The P&C business achieved the best combined ratio in 15 years and double digit top- line growth.
“Higher risk-adjusted prices and continued measured progress towards our growth ambitions took P&C gross written premiums to more than USD 40 billion for the first time.
“The extreme weather events of 2021 again highlight the pressing need to take collective action to address climate change. The insurance industry has a natural alignment with the sustainability agenda, and I am particularly proud of our work in this area throughout the past year as we continue to reinforce Zurich’s leadership position.
“Zurich continues to benefit from an excellent balance sheet and financial flexibility. This, together with our strong operating results, has allowed us to propose a 10% increase in the dividend per share to CHF 22.
“Zurich is in outstanding health as we celebrate our 150th anniversary this year. I am optimistic about Zurich’s momentum, the skills and enthusiasm of our people and the opportunities that lie ahead of us. I have every confidence we will meet or exceed our 2022 targets.”
