Zurich Insurance Group AG said it expects to beat all its financial targets for the 2017-2019 period as the global insurer enters the the final stretch of a three-year turnaround.
“In 2016, we gave ourselves ambitious targets and we launched a bold new strategy,” Chief Executive Officer Mario Greco said. “Today, we are proud to report that we are set to exceed all our targets and that the strategy is proving successful.”
The company also reported rising net income and beat analyst estimates for underwriting performance at the biggest unit.
- The combined ratio at Property & Casualty declined to 95.1%, beating analyst estimates of 96.3%, and the lowest level in the past decade. A ratio below 100 indicates that an insurer is underwriting profitably.
- Gross written premiums at Property & Casualty, the insurer’s biggest unit, grew 4% like-for-like in the first half to $18.6 billion with underlying growth across all regions.
- First-half net income after tax rose 14% to $2 billion as Greco’s cost initiatives took hold and like-for-like sale grew slightly.
- The insurance industry has historically struggled with costs rising faster than premiums. That means there’s constantly pressure on underwriting margins. Last year, however, this situation reversed, according to BI analysts.
- The insurer is planning to present its plans for the next three years at an investor day in November.
- Shares in the company have risen about 13% this year, in line with rivals and the blue chip Swiss Market Index.
- Zurich, Switzerland’s largest insurer, surpassed UBS Group AG in market value for the first time in February, making it the largest financial services company in the country.
- Chief financial officer George Quinn said in May that an improving trend in pricing is a “positive signal for the rest of the year.”
- Zurich Insurance embarked on a restructuring program and pledged to reduce costs by $1.5 billion through 2019. The company had achieved $1.3 billion of that that by the end of June.
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