Zurich posts record earnings, raises dividend, and sets pace for new plan

Zurich - Zurich Insurance Group (Zurich) delivered record results, driven by strong momentum in all areas of the business, with P&C and Life achieving their highest-ever business operating profits and the Farmers Exchanges lowering their combined ratio by 12% percentage points in just one year. This strong set of results together with Zurich’s track record of consistent delivery position the company strongly at the beginning of the new three-year cycle.

The Group’s attractive dividend policy is confirmed by proposing a dividend of CHF 28 per share, an increase of 8%. Over the last eight years, Zurich has distributed more than CHF 28 billion to its shareholders in cash dividends and share buybacks contributing to an industry-leading total shareholder return of 16% per year.

“All our businesses delivered an outstanding performance in 2024. P&C and Life posted their best-ever results and Farmers grew profitably. We continue to experience positive rate momentum in our commercial business and a healthy pricing environment in retail, positioning us strongly at the start of the new cycle for which we have already set our most ambitious targets yet. This reinforces our ability to execute and deliver on our plans and our commitment to create consistent long-term value for all our stakeholders” says Mario Greco, Group Chief Executive Officer

Zurich’s P&C business continues to increase profitability by focusing on underwriting discipline, maintaining a balanced portfolio, and simplifying customer and broker interactions. As a result of these efforts, P&C increased its insurance revenue to USD 44.8 billion, up 6%, and improved its combined ratio to 94.2%. The Group’s leading Commercial Insurance business delivered a strong BOP of US$3.4 billion, while the Retail business increased its BOP to US$1.0 billion, up US$618 million or 171%. 

Life shows ongoing successful execution of its strategy supported by a robust underlying performance, delivering a record BOP of US$2.2 billion, up 8% compared to the prior year. Gross premiums grew strongly in capital-light lines to US$29.6 billion, with the unit-linked and protection businesses up 6% on a like-for-like basis. Building on this consistently strong delivery and to capture further growth opportunities, the Group has consolidated its Life protection business under a single unit, as announced at the November 2024 Investor Day.

The Farmers Exchanges continued their positive momentum, with gross written premiums up 4% compared with the prior year and a 11.9 percentage points improvement in the combined ratio to 91.4%. The surplus ratio was estimated at 42.4% as per December 31, 2024, well above the target range of 34-38%. These results reflect the positive impacts from the ongoing business transformation at Farmers and the Farmers Exchanges3 over the last year and position the business well for further growth. 

As a result, Farmers Management Services (FMS) contributed a record BOP of US$2.1 billion. This is a 5% increase compared to the prior year, reflecting the growth at the Farmers Exchanges, lower operating expenses and the BOP contribution from the brokerage entities Zurich acquired from the Farmers Exchanges in December 2023.

2025 California wildfires

The Farmers Exchanges,3 which are based in California, are deeply committed to supporting the recovery process for all their customers, employees and communities impacted by the devastating fires that occurred in the first quarter of 2025. As communicated by the Farmers Exchanges, initial estimates indicate an expected net pre-tax loss resulting from the wildfires of US$600 million and approximately US$250 million reinstatement premium payment. Farmers’ strong capital base and underlying profitability positions it well to manage this event and continue to grow the business.

For Zurich, this event is estimated to have a pre-tax impact of US$200 million including Farmers Re. 

Outlook

Zurich expects compound annual growth in Core earnings per share (EPS) to exceed 9% in 2025–2027 compared to a baseline of US$40.1, a Core ROE of more than 23% in 2027 as well as cumulative cash remittances in excess of US$19 billion over the three-year cycle. This compares with a target of 8% CAGR of EPS growth in 2023–2025, a BOPAT ROE of more than 20% in 2025 and cumulative cash remittances in excess of US$13.5 billion over the period 2023–2025, all of which were established at the 2022 Investor Day.

The investor and media presentation provides more detailed guidance for the 2025 earnings outlook. It includes mid-single digit percentage growth in insurance revenue for P&C, with the Life BOP expected to be in line with the record high level of 2024.

Capital position

As of December 31, 2024, Zurich’s Swiss Solvency Test (SST) ratio was estimated at 252%4, which compares with 234% as of December 31, 2023. The increase was mainly driven by favourable market movements, capital generation in excess of dividend accrual, as well as a positive impact from the disposal of an annuity book in Chile and the issuance of US$500 million of subordinated debt in October. Cash remittances rose by US$2.4 billion to US$7.1 billion driven by operational earnings and remittances of excess capital.

In 2024, Zurich became one of the best-in-class insurers among European peers for its financial strength ratings with three rating agencies. This is the result of recent upgrades by Moody’s (Financial Strength rating to Aa2 from Aa3 in September) and AM Best (Issuer Credit rating upgraded to aa from aa- in November). S&P’s Insurance Financial Strength (IFSR) rating remained at the AA level. This reflects the recognition of the Group’s diversified and resilient earnings profile, balance sheet strength and strong capital flexibility, underpinned by conservative risk management.