Zurich sets new financial targets over next three years

Zurich sets new financial targets over next three years

Updated: 16 days, 13 hours, 2 minutes, 41 seconds ago

Financial giant Zurich has set new financial targets for itself, which it plans to achieve between 2023 and 2025.

Zurich LogoThe firm said in a statement that it was looking to boost business operating profit after tax return on equity (BOPAT ROE) to more than 20%, see compound organic growth in earnings per share of 8% per year, have cumulative cash remittances of more than $13.5bn, and have a Swiss Solvency Test ratio of at least 160%.

Mario Greco, group chief executive officer of the firm, said: “In the last three years, against a backdrop of a global pandemic and its economic fallout, the growing impact of climate change and war in Ukraine, our successful strategy of customer focus, simplification and innovation has consistently delivered for shareholders and customers.

He added: “After two successful strategic cycles, we have already achieved much, but our ambition does not end here. Now, we plan to further accelerate our strategy to build a clear leadership position in the insurance industry. Over the next three years, we intend to further grow our Property & Casualty margins and profits in the Life business. We expect Farmers to maintain mid-single-digit growth rates in revenues, continuing recent trends. With this business performance, and with strong expense discipline, we aim to achieve a business operating profit after tax return on equity in excess of 20% by 2025.”

This news follows Zurich’s reporting of its most-recent results nearly a week ago when it said that that gross written premiums in its property and casualty segment were up 8%, compared to the same period in 2021.

The firm said in a statement that gross written premiums in property and casualty for the first nine months rose 13% compared with the previous year on a like-for-like basis, adjusting for currency movements. The 8% rise, it said, reflected the strengthening of the US dollar against major currencies.

Zurich said at the time that gross written premiums in property and casualty for the first nine months rose 13% compared with the previous year on a like-for-like basis, adjusting for currency movements. They rose 8% in US dollar terms, reflecting the strengthening of the U.S. dollar against major currencies.

In Europe, the Middle East, and Africa (EMEA), gross written premiums increased 10% on a like-for-like basis. Growth was driven by a strong performance across the region, most notably in the UK, Switzerland, and Germany. Premium rates increased 9% in commercial insurance and 3% in retail insurance.

North America grew 14% on a like-for-like basis compared with the previous year, with crop insurance contributing almost 40% of the growth. North America’s strong performance continues to benefit from rate increases, which have been developing better than expected since the beginning of the year and which remain above loss cost trends.

In Asia Pacific, gross written premiums increased 19% on a like-for-like basis compared with the previous year. Higher retail sales and a rebounding travel insurance business in Australia drove strong growth across the region.

In Latin America, gross written premiums increased 22% on a like-for-like basis, benefiting from strong growth in both retail and commercial insurance across the region.

The third quarter saw elevated natural catastrophe losses driven mainly by Hurricane Ian making landfall in the U.S for which, based on current estimates, the Group has recognized a net impact of $550m on a pre-tax basis. Given this, the Group’s catastrophe loss ratio for the first nine months of 2022 is estimated to be about 2 percentage points above long-term trends. The higher frequency and severity of natural catastrophe events in recent years underlines the importance of the steps the Group is taking to actively manage its exposure to these events.

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