Zurich Financial Services Australia has mirrored its global parent in recording solid growth among its life insurance and investment portfolios, according to CEO David Smith. 

Parent company Zurich Financial Services has reported a 6% increase in annual net profit of $US3.2 billion ($3.7 billion) as strong life growth offset slower trade in general insurance.

Zurich global life new business rose 4% to a net value of $US782 million ($900 million), but general insurance gross written premium fell 8% to $US34.2 billion ($39.4 billion).

Despite the fall in general insurance income, Zurich improved profitability with a combined ratio of 96.8% against a previous figure of 98.1%.

Group investment income lifted 5% to $6.1 billion ($7 billion).

While local figures weren’t available, Mr Smith told insuranceNEWS.com.au 2009 was a “stellar year” for life and investments.

“As a total business it was most definitely a game of two halves,” he said. “The first half was riddled with tragic events such as the Victorian bushfires, and of course we had the global financial crisis. After that we saw a turnaround in fortunes, especially within investment markets.”

He says a competitive general insurance market has kept the lid on rising rates, with Zurich premiums rising “in the order of” 7%.

“Everyone thought rates would harden a little bit quicker and deeper than they have. There is a lot of capacity at the moment and that is putting the dampener on rates.”

Mr Smith believes the company is continuing to benefit from the introduction of automatic flood cover on Australian commercial policies from September 2008.

“It showed the market it can be done and now some of our competitors have followed us,” he said. “We love to lead and this is an example of where it made sense, so we did it.”