Zurich profit jumps from fewer disasters, higher premiums

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14 May 2012

Global insurer Zurich increased profit by 78% to $US1.14 billion ($1.13 billion) in the first quarter, which CEO Martin Senn attributes to fewer catastrophes and disciplined underwriting.

Gross written premium (GWP) from general insurance grew 4% to $US10.47 billion ($10.39 billion) and operating profit jumped to $US856 million ($850 million) from $US280 million ($278 million).

The combined ratio was 94.6% compared with 103.6%.

The group says the improvement came from disciplined underwriting and expense management, noting that disasters in Australia, Japan and New Zealand hit last year’s result. Average rates increased 3% but retention rates were stable, Zurich says.

Mr Senn says acquisitions and alliances have allowed Zurich to deepen its 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,” he said.

“In Singapore, we now hold the licence to access all of our target segments for life insurance products.”

GWP from life for the quarter rose 16% to $US7.4 billion ($7.3 billion) but operating profit fell 19% to $US293 million ($291 million) on lower interest rates and acquisition-related costs.

GWP from US general insurer Farmers Management Services grew 49% to $US1 billion ($990 million), but operating profit fell 2% to $US372 million ($369 million) because of weather-related losses in the reinsurance division.