Zurich Insurance Group has reported that Q1 2023 P&C insurance revenue was up 11% on a like-for-like basis to $9.41 billion, driven by strong growth in commercial insurance and a further improvement in pricing.
According to Zurich, all regions contributed to the aforementioned growth, though North America displayed the strongest performance, delivering around 50% of total P&C growth on a like-for-like basis.
Commercial insurance further improved its high level of returns, while retail rates started to increase.
Q1 2023 gross written premiums (GWP) in P&C climbed to $11.97 billion, marking a 10% increase compared with Q1 of 2022, adjusting for currency movements.
The growth was supported by higher premium rates in P&C, with commercial insurance experiencing a 6% increase in rates.
Meanwhile, new business premiums in Q1 of 2023 increased 17% in U.S. dollar terms, and 23% on a like-for-like basis.
Life new business added $265 million of contractual service margin (CSM) in Q1 of 2023, 11% below the prior-year period on a like-for-like basis.
This was driven by higher new business premiums with lower margins mainly due to a less favorable business mix.
Finally, as of March 31, 2023, Zurich’s Swiss Solvency Test (SST) ratio is estimated at 258%, which remains well in excess of the firm’s ≥160% target level. This also compares with 267% as of January 1, 2023.
Zurich says that this reduction was driven by unfavourable market movements, mainly due to lower interest rates, and a modest negative impact from model and assumption updates.
Zurich Group Chief Financial Officer, George Quinn, said, “The Group has made a strong start to the new financial cycle. We saw robust growth in Property & Casualty (P&C), with a double-digit increase in premiums in North America, mainly driven by rate increases.
“Underlying commercial insurance margins have continued to improve but we are being cautious about recognising the full benefit as we gain familiarity with the new accounting standard.
“Retail markets are seeing higher prices on renewal and margins will improve over the course of the year as earned rates start to exceed loss cost trends.”
He continued, “Our Life business has seen strong growth in new business volume, while in the short term, business mix has reduced margins.
“The Farmers Exchanges saw underlying growth while focusing on improving the underwriting result. We have also announced two further back book transactions, which mark an important step in our commitment to reduce volatility and improve the quality of returns.
“These transactions also create the potential to deliver returns at even higher levels in the future. These are our first financial results under IFRS 17.”
Quinn concluded, “I would like to thank all my colleagues for their hard work to reach this milestone. We have had a strong start to the year and our new financial cycle and we remain focused on executing our strategy.”