Management said it was “confident” to achieve its goals for next year.
Zurich Insurance improved its performance in the first nine months of 2021, but the cost of natural disasters could weigh on the insurer’s annual profitability. Management is nevertheless confident of achieving its financial objectives.
Natural disasters have followed one another this year, both in North America and in Europe. After the winter storm Uri which hit the United States in February, Europe was swept this summer by violent storms and floods, in particular in the south of Germany. To complete the picture, hurricane season hit the east coast of the United States again with Hurricane Ida in August.
All of this bad weather caused a slate of around $ 1 billion (around 910 million francs) in total. In detail, Zurich Insurance expects charges of around 450 million this year related to Hurricane Ida. These costs are in addition to the 150 to 200 million estimated for summer storms and floods in Europe and the 350 million related to winter storm Uri, the company detailed Thursday.
Due to these climatic vagaries, the combined ratio is expected to exceed the long-term average by 3 to 4 percentage points.
Faced with these meteorological hazards, which are likely to become more frequent with global warming, Zurich Insurance has managed to increase its revenues in all directions, in particular thanks to an increase in premiums. These are expected to increase particularly in North America, but also in Latin America, as well as in the Europe, Middle East and Africa region.
In particular, the group acquired 1.5 million new private customers.
Between January and the end of September, the company posted gross premiums in damage and accident insurance of $ 31.2 billion, up 14% year-on-year. Apart from positive currency effects, the insurer benefited from an increase in premiums in all regions for business customers.
In life insurance, annual premium equivalents rose 7% to 2.8 billion. The group has benefited in this area from a solid activity in the business related to provident funds and products. In North America and Asia-Pacific, on the other hand, the development was negative.
As for activities in the United States with partner Farmers Exchanges, the latter have garnered gross premiums up 19% to $ 18.2 billion. Farmers has benefited from an improvement in all of its operations. Its business was weighed down last year by refunds of premiums of 331 million due to the Covid-19 pandemic.
These figures, which do not include details on profitability, are in line with, or even higher for Farmers, the forecasts of analysts consulted by AWP.
“The group is making significant progress in achieving its strategic and financial goals,” CFO George Quinn said in a statement. The insurer believes that it is in a position to achieve its objectives by 2022.
In August, General Manager Mario Greco had already shown himself confident about the achievement of ambitions by 2022. These include a return on invested capital of more than 14%, against 13% at the end of the first six month of 2021.
On the Swiss Stock Exchange, investors did not seem reassured and abandoned the stock. The latter lost 2.3% to 399.50 francs, in a stable SMI index.