Zurich Posts $1.1 Billion Q1 Net Profit; Near $1.4 Billion Operating

May 15, 2012

The Zurich Insurance Group reported a business operating profit (BOP) for the first quarter of 2012 of $1.3758 billion, a 62 percent rise from $854 million in Q1 2011, and net income after tax of $1.143 billion for the period, a 78 percent rise from $640 million in last year.

The report gave additional financial highlights as follows:
– Total Group business volumes – $19.629 billion – $17.869 billion in Q1 2011
– Net investment return on Group investments 0.9 percent – same figure last year
– Total return on Group investments 2.1 percent – 0.3 percent in Q1 2011
– Shareholders’ equity – $31.815 billion – $31,636 billion in Q1 2011
– Diluted earnings per share –CHF 7.16 [$7.66] CHF 4.09 [$4.37] for Q1 2011
– Return on common shareholders equity (ROE) 14.4 percent – 8.3 percent in Q1 2011
– Business operating profit (after tax) return on common shareholders’ equity (BOPAT ROE) 13.4 percent – 8.5 percent in Q1 2011

CEO Martin Senn commented: “The execution of our strategy continues to be on track. Our acquisitions and alliances have allowed us to deepen our position in several key markets. Last month, we signed a 10 year exclusive distribution agreement to be the provider of wealth insurance products to HSBC clients in the United Arab Emirates, Bahrain and Qatar.

“In Singapore, we now hold the license to access all of our target segments for life insurance products, while in Malaysia, we have completed the renaming of MAA to the Zurich brand combining the strong local heritage and market position with global insurance expertise. And in Latin America, we already see the positive impact of the insurance businesses acquired from Santander.”

Zurich also reported that Farmers business operating profit decreased by $8 million, approximately 2 percent to $372 million, “due to the result from reinsurance operations.”

Farmers Management Services business operating profit increased by $25 million or by 8 percent to $354 million, “driven by the increase in gross earned premiums in the Farmers Exchanges, which are managed but not owned by Farmers Group, Inc., a wholly owned subsidiary of the Group.”

Farmers Re business operating profit decreased by $33 million or by 65 percent to $18 million, “reflecting high weather-related losses in March 2012, the impact of which was exacerbated by the increase in the participation rate of the All Lines quota share reinsurance agreement with the Farmers Exchanges (All Lines agreement) from 12 percent throughout 2011 to 20 percent effective December 31, 2011.”

Farmers Management Services management fees and other related revenues increased by $27 million, or 4 percent, to $710 million, “driven by the 3 percent increase in gross earned premiums in the Farmers Exchanges.”

Farmers Re’s gross written premiums and policy fees rose by 49 percent to $1.053 billion, which the announcement said “reflects the quota share increase in the All Lines agreement and the 4 percent gross written premiums growth in the Farmers Exchanges.”

The complete report and information on accessing the earnings conference call may be obtained on the company’s website

Source: Zurich Insurance Group

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