Global insurer Zurich has reported a 16% rise in business operating profit (BOP) to USD 5.3 billion for 2019, driven by growth across the business and a strong underwriting result within its Property and Casualty (P&C) segment.
Zurich’s elevated BOP for 2019 compares with the USD 4.6 billion recorded a year earlier, while net income increased by 12% to USD 4.1 billion, the highest since 2010.
The insurer has reported growth across the business for 2019, but notes a particularly strong performance within its P&C operation, which saw BOP rise by a huge 38% to USD 2.9 billion, compared with USD 2.1 billion in 2018.
The firm notes that this was driven by an improved underwriting performance and a higher investment result, which more than offset challenges in the North American crop business throughout the year.
Combined, improved pricing and underlying growth saw the P&C business return to top-line growth in the year, with gross written premiums expanding by 6% to USD 34.1 billion.
Zurich’s P&C business achieved price increases of around 4% overall, noting that the level of rate increases improved for most regions when compared with 2018 and throughout the year.
For 2019, Zurich’s P&C operation has recorded a combined ratio of 96.4%, which is stronger than the 97.8% posted in 2018, and which the firm says is a result of a reduction in the underlying accident year combined ratio, and lower catastrophe losses.
Zurich’s Group Chief Executive Officer (CEO), Mario Greco, commented: “Today’s results confirm that we have successfully executed our plans over the last three years. It was an amazing journey, during which we significantly strengthened the business, organically and through transactions, reduced P&L volatility and improved customer services. This is also reflected in a further proposed increase of our dividend to CHF 20 per share, the third increase in a row.”
Turning to the Life segment, and Zurich reports that the unit’s BOP increased by 2% on a like-for-like basis to USD 1.5 billion, while underlying growth in EMEA and Latin America more than offset declines in Asia Pacific and North America.
New annual premium equivalent (APE) sales fell by 7% in the year. Zurich states that underlying growth was achieved in all regions, with particular growth coming from the corporate pension business in Switzerland, higher unit-linked sales in Brazil and Italy, and also the retail protection business in the UK.
In Farmers, Zurich reveals that in 2019, gross written premiums increased by 2% to USD 20.6 billion, while the unit’s BOP improved to USD 3.8 billion. Overall, the unit recorded a 2019 combined ratio of 100%, versus 99.9% in 2018.
“Today, we feel proud of these results and we are aware of our strengths: we are a simpler, more agile and more efficient company with a compelling strategic vision which will continue guiding us for the next phase of our journey.
“Very importantly, both customer and employee satisfaction have been rising through the last years. With this we are well positioned to meet the ambitious new targets we set ourselves for the next three years. We look forward with real confidence and excitement as we continue our strategic journey.
“We remain committed to supporting our customers, employees and communities in facing challenges such as climate change and work security, and will continue to play a leading role in building a more sustainable future,” said Greco.