Zurich reports strong top-line growth across all businesses

Zurich - Zurich Insurance Group (Zurich) has announced that it has delivered a robust performance in the first nine months of the year, with all businesses contributing positively. The P&C business continues to show strength while Life and Farmers build on their positive momentum.

"Our nine-month results confirm the continued strong momentum across all of Zurich’s businesses. In P&C, margins in Commercial Insurance continue to be favorable, and performance in Retail is improving. We are on track to exceed all current targets and look forward to presenting the new plan for the next 3 years at our Investor Day on November 21," says Claudia Cordioli, Group Chief Financial Officer.

Growth in all segments

Zurich's P&C business saw a 4% rise in gross written premiums. The positive momentum from the first half of the year continued into the third quarter due to increasing rates in Commercial Insurance and Retail.

In Commercial Insurance, gross written premiums were up 2% in U.S. dollars, despite less favorable commodity prices affecting the U.S. crop insurance business. Excluding crop insurance, gross written premiums grew 5%. Rates increased 4% compared to the prior year.

In Retail, gross written premiums increased 10% in U.S. dollars, which was supported by rate changes of 5% in the first nine months of the year.

Zurich’s Life insurance business showed a robust performance, with new business premiums up 6% on a likefor-like3 basis. This increase was driven by strong sales in the unit-linked segment, primarily through Zurich’s bank distribution partners and higher sales of protection products, most notably in Japan and the UK.

Farmers Management Services has continued its growth trajectory with a 6% increase in underlying fee income in the first nine months, supported by growth at the Farmers Exchanges and the brokerage entities Zurich acquired from the Farmers Exchanges
in December 2023.

The Farmers Exchanges saw a 4% rise in gross written premiums in the first nine months, supported by continued positive rate adjustments and higher new business growth. The combined ratio for the first nine months was 93.5%. The surplus ratio was 37.7% at September 30, 2024, a 4.1 percentage points increase since the start of the year, mainly due to profitable underwriting results, which is a testament to the impact of the business transformation at Farmers4 over the last year.

Natural catastrophes

In the first nine months of the year, the Group has seen natural catastrophe losses with a combined ratio impact of 3.4%, compared to 3.1% in the prior year period. The third quarter includes an estimated pre-tax loss for Hurricane Helene of USD 160 million. Preliminary pre-tax losses attributable to Hurricane Milton in the fourth quarter are estimated to be less than USD 200 million.

Gross written premiums (GWP) in P&C rose 4% compared with the prior-year period on a like-for-like basis, adjusting for currency movements and excluding Argentina due to the impact of high inflation and currency depreciation. In U.S. dollar terms, gross written premiums increased 4%.

Growth was supported by higher premium rates in P&C in line with the first half of the year which was driven by a 5% rate change in retail while commercial insurance experienced a 4% increase in rates.

In EMEA, GWP were up 8% on a like-for-like basis. Growth in excess of rates was driven by a strong performance from all countries across the region, both in retail and commercial insurance.

GWP in North America remained stable on a like-for-like basis compared with the previous year but rose 4% on a third quarter discrete basis. Underlying growth was offset by a reduction in crop volumes year-on-year due to less favorable commodity price developments throughout the year. Excluding crop, gross written premiums increased 3% in the first nine months of the year driven by all other lines of business.

In Asia Pacific, GWP were 9% higher on a like-for-like basis compared with the previous year. Rebounding travel insurance sales in Australia and higher retail sales across the region were the main contributors.

Latin America saw an increase of 14% in GWP on a like-for-like basis, benefiting from strong commercial growth and higher retail sales, particularly in Brazil and Mexico

In Life, the Group continued to grow top-line and new business during the third quarter. In the first nine months, new business premiums increased 4% in U.S. dollar terms and 6% on a like-for-like basis, driven by growth in unit-linked and protection, which were up 23% and 11% respectively on a like-for-like basis.

In EMEA, new business premiums were 4% below prior year on a like-for-like basis. The reduction was driven by lower sales in retail savings, which reflect exceptional sales volumes in Spain in the prior year period. This was mostly offset by higher sales of protection and unit-linked products in all major countries, most notably in the UK, Switzerland and Germany.

In North America, new business premiums were 76% higher on a like-for-like basis compared with the prioryear period, benefiting from large corporate schemes.

In Asia Pacific, new business premiums were up 4% on a like-for-like basis driven by continued growth of protection sales in Japan.

In Latin America, new business premiums rose 23% on a like-for-like basis. The increase was driven by strong unit-linked sales and benefited from lower discount rates.

New business written in the first nine months added USD 824 million to the contractual service margin (CSM), 6% more than in the prior year on a like-for-like basis, reflecting higher sales volumes and a modest improvement of new business margin.

Short-term insurance contracts, predominantly related to the Latin America protection business, generated USD 2,099 million of insurance revenue in the first nine months, up 26% in U.S. dollar terms and 12% year on year on a like-for-like basis.

Fee revenue generated by investment contracts, which are mainly written in EMEA, grew 11% to USD 517 million. This is up 10% on a like-for-like basis compared with the prior year, with growth driven by higher assets under management.

Capital position

As of September 30, 2024, Zurich’s Swiss Solvency Test (SST) ratio is estimated at 224% and remains well in excess of the Group’s target level of at least 160%. This compares to 232% as of June 30, 2024, with the decrease reflecting the impact of market movements mainly due to lower interest rates in the third quarter.