Zurich Insurance Group has reported that H1 2023 P&C insurance revenue was up 10% on a like-for-like basis to $20,163m, while business operating profit was down to $ 2,247m, from $2,379m in H1 2022.
This quarter P&C (BOP) was 6% lower than in the previous year. In local currency, first half P&C BOP was 2% lower than in the previous year, driven by a higher combined ratio and the absence of a non-recurring gain from a real estate transaction in the prior year.
According to the firm, this was partially offset by an improved investment result.
The combined ratio increased 1.3 percentage points year over year to 92.9% as the Group continues to maintain a cautious approach to reserving to minimise volatility.
Retail P&C saw a material improvement in margins in H1 2023 compared with the second half of 2022, with the accident year combined ratio (excluding catastrophes) improving to 97.0%.
Commercial P&C maintained strong returns with an accident year combined ratio (excluding catastrophes) of 90.1%, compared with 90.4% in the second half of 2022.
Gross written premiums (GWP) of $24,560m, grew 10% on a like-for-like basis, adjusting for currency movements, with growth in both retail and commercial insurance across all regions.
In EMEA, growth was driven by a strong performance across the region, particularly in the UK, Switzerland, Germany and Italy. North America continued to benefit from higher rates, particularly in property and motor lines.
Asia Pacific saw a strong recovery in the travel insurance business and growth in the retail motor business while Latin America showed strong commercial growth and increased retail sales across the region. In US dollars, Zurich’s GWP rose 8%.
The firm noted that, in P&C Commercial Insurance, rates increased 7% in H1 2023, with increases in North America at 9%, driven by further acceleration in the Property portfolio.
Additionally, P&C retail improved its profitability in the first half compared with the second half of 2022, thanks to pricing actions taken last year as well as additional premium rate increases of 4% in the first half of 2023.
Zurich anticipates these effects to continue through the second half of 2023 and beyond.
Group Chief Executive Officer Mario Greco commented: “Zurich has made a strong start to the new financial cycle. We have high expectations for the Group’s performance and we set targets accordingly. More importantly, we deliver.
“We’ve achieved a return on equity that’s among the highest in the industry, while minimising volatility, maintaining a strong balance sheet and taking advantage of the growth opportunities available to us.
“Our 2023-2025 targets are our most ambitious yet, but our agility, flexibility and focus on delivering results make me confident that we will achieve them.”
Zurich reported Group business operating profit of $3,720m at the same high level as in the prior year, with 3% growth when measured in local currencies.
Additionally, net income after tax attributable to shareholders (NIAS) increased 6% to $2.5bn compared with the prior-year period, mainly due to a more favourable net impact from capital gains and losses.
NIAS also included $0.1bn of costs incurred related to the repurposing of some of Zurich’s own use real estate portfolio.