Despite the impact of highly adverse economic circumstances as well as the continued deterioration of financial markets during the first quarter, Zurich Financial Services Group (Zurich) reported today another solid operating performance for the first three months of 2009, showing a continuous improvement over the discrete third and fourth quarter performance in 2008. Zurich achieved these results based on its continued focus on financial and underwriting discipline, operating efficiency, robust risk management and its well-balanced portfolio of businesses.
“We have shown continual quarter on quarter improvement since the financial crisis began, and remain confident in our strategy despite the ongoing financial turmoil,” remarked Zurich’s Chief Executive Officer James J. Schiro. “Though we anticipate 2009 to remain challenging, I am pleased with our ability to maintain our strong solvency ratio and add to shareholders’ surplus while capitalizing on market opportunities that emerge.”
Three-month performance highlights1 include:
- Business operating profit (BOP) of USD 1.1 billion, a decrease of 40%. Annualized BOP ROE2 after tax of 14.8%
- Net income3 of USD 362 million, a decrease of 75%. Annualized return on equity (ROE) of 6.6%
- General Insurance gross written premiums and policy fees of USD 9.8 billion, down 12% or 3% in local currencies, and a combined ratio of 95.8%
- Global Life new business value4, after tax, down 7% to USD 149 million, with new business margin, after tax (as % of APE), of 20.6%. APE basically unchanged but up 16% in local currencies
- Farmers Management Services’ management fees and other related revenues up 6% to USD 623 million
- Shareholders’ equity of USD 22.3 billion, an increase of 1% over year end
The Group continued to exploit profitable opportunities, expanding its product range and distribution capabilities organically as well as through the ongoing successful integration process of its recent acquisitions completed in Europe, the US and emerging markets. Furthermore, Zurich continued to reap the benefits of the continuous improvements embedded through The Zurich Way initiatives, targeting USD 900 million of after-tax benefits for each year from 2009 until 2011 as well as an additional USD 400 million in expense savings for 2009 to mitigate current economic challenges. The company is well on track to achieve both targets this year.
