Partial increase in premiums for Zurich Insurance in the first quarter

Partial increase in premiums for Zurich Insurance in the first quarter
Partial increase in premiums for Zurich Insurance in the first quarter

Gross premiums increased by 5% to $12.6 billion in property and casualty insurance, driven as much by activities with individuals as with businesses. The stock climbed 2.4% around 10 a.m.

Zurich Insurance recorded a mixed performance in the first three months of 2024, progressing in the main property and casualty business but declining in life insurance. The insurer plans to increase its rates during the year, hoping to grow in its core business.

In the first quarter, gross premiums increased by 5% to 12.6 billion dollars (11.3 billion francs) in property and casualty insurance, driven as much by activities with individuals as with businesses, according to a press release. published Thursday. The group also benefited from an increase in premiums of 5% on average in this segment.

Damage caused by natural disasters had an impact of 1.6% on the combined ratio (ratio between damage costs and premiums). The latter was not detailed, Zurich Insurance only publishing a few key figures in the first quarter.

The equivalent of new business premiums in life insurance, however, declined by 4% to almost 4.0 billion, due to a sharp decline (-13%) in the main region Europe, Middle East and Africa. North America (+10%), Asia-Pacific (+19%) and Latin America (+8%) on the other hand showed solid growth in this area. A year ago, Zurich Insurance recorded solid results in savings activities with private clients in Spain, a performance which has not been repeated.

As for business with the American partner Farmers, gross premiums increased by 6% to 7.1 billion, mainly thanks to an increase in prices. This activity “is on track” to “reach or exceed” growth of around 5% this year, estimated financial director Claudia Cordioli.

While the key figures were in line with AWP agency forecasts in the property and casualty business and Farmers, they missed expectations in life insurance.

Price jump in North America

The company has not made any new forecasts for the future. Until now, management forecast growth of around 5% in general insurance revenues for 2024 and operating profit in life insurance at least as high as in 2023. The 8% growth target of earnings per share over the period 2023-2025 should be exceeded, with an estimate last February of around 10%.

Managing Director Mario Greco clarified, during a telephone press conference, that a sharp increase in prices is to be expected in automobile insurance with business customers in North America, where prices have jumped by 14 % in the first quarter. Prices should also increase in activity with SMEs and private clients, particularly in Europe and Switzerland. These increases are made necessary by inflation and the resulting increase in costs.

The 1.1 billion francs share buyback program, announced in February, will be launched “in the coming weeks,” added the company.

Vontobel analysts noted results generally in line with their expectations, highlighting the successful rebound in the Farmers business. The solvency ratio of 232% at the end of March was down 2 percentage points compared to the end of 2023 and 6 points lower than the Zurich bank’s forecasts, but this “is not a problem”, estimated the experts in a market commentary.

On the Swiss Stock Exchange, investors appreciated this news, pushing the insurer’s stock up 2.4% to 464.20 francs in an SMI index up 0.46% at 10:05 a.m.

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