Zurich Financial Services Group reported today a solid nine-month[1] operating performance, with balance sheet strength and solvency margins at near-record levels, and continued profitable growth in Global Life and Farmers underpinning the Group’s 27th consecutive quarter of profitability.
Swiss insurer Zurich Financial Services AG said on Thursday third-quarter profit rose 138 percent, broadly in line with expectations, after claims on hurricanes Gustav and Ike battered profit a year earlier.
Europe’s fourth-largest insurer by market value said its third-quarter business operating profit came in at $1.5 billion, up from $636 million a year earlier and broadly in line with the average forecast of $1.6 billion in a Reuters poll of analysts.
Business operating profit for the discrete third quarter 2009 was USD 1.5 billion, a 138% increase over the same prior-year quarter, with net income[1] of USD 909 million, a 490% increase over the same prior-year quarter. Both figures represent the fourth consecutive quarter-on-quarter improvement since the third quarter 2008.
“In this period of ongoing economic uncertainty, our focus remains on maintaining our strong balance sheet, driving operational excellence and delivering sustained profitable growth,” remarked Zurich’s Chief Executive Officer James J. Schiro. “By effectively balancing these levers, we have generated excellent quarterly results and ensured that Zurich is well positioned for the future under any economic scenario.”
Nine-month performance highlights [2] include:
- Business operating profit (BOP) of USD 4.1 billion, down 3% but an increase of 2% as measured in local currencies, with all core operating segments improving on a local currency basis. Annualized BOP ROE3 after tax of 16.9%
- Net income of USD 2.2 billion, a decrease of 24%. Annualized return on equity (ROE) of 11.6%
- General Insurance gross written premiums and policy fees of USD 26.3 billion, down 10% or 3% in local currencies, and an improved combined ratio of 96.9%
- Global Life new business value4, after tax, of USD 520 million, up 2% or 11% in local currencies. New business margin, after tax (as % of APE), of 21.8%, with APE up 5% or 17% in local currencies
- Farmers Management Services’ management fees and other related revenues up 8% to USD 2.0 billion, with business operating profit also up 8% to USD 992 million
- Shareholders’ equity of USD 28.5 billion, an increase of 29% over year end 2008, boosting the Group’s solvency position to 209%.
The Group continued to exploit emerging opportunities, expanding its product range and distribution capabilities organically as well as through the ongoing successful integration of its recent acquisitions completed in Europe, the U.S. and emerging markets. Furthermore, Zurich continued to transform its operating platforms in ways that improve the effectiveness and efficiency of its business. The company is well on track to meet its operational improvement target under The Zurich Way initiatives of USD 900 million after tax, as well as its additional expense saving target of USD 400 million for the current year.
Click here to read the full third quarter result
Note:
[1] Attributable to shareholders.
[2] All comparisons refer to the first nine months of 2008 unless stated otherwise.
