Life business helps Zurich to stabilize profits in H1
Zurich’s life business has enabled Zurich to post a stable operating profit in the first half of 2017, offsetting the impact caused by the UK’s personal injury Ogden rate change.
The Swiss insurer posted operating profit of $2.17 billion in the first half of 2017, unchanged compared to the same period of 2016.
The operating profit was hit by a lower Ogden discount rate in the UK, which the government decreased by more than expected in February, causing companies to revise their financial results.
Excluding Ogden, Zurich’s operating profit would have increased by 14 percent year on year to $2.46 billion in the first half.
But Zurich’s results were stabilised by growth in its life business. Operating profit in the segment grew 16 percent to 650 million in the first half. At the same time, operating profit in the property/casualty business declined 15 percent year on year to $1.02 billion due to the Ogden rate change. The combined ratio deteriorated slightly to 99.5 percent from 98.1 percent over the period. Gross written premiums in P&C declined 3 percent to $18.01 billion.
Overall, group net income was down 7 percent year on year at $1.50 billion in the first half of 2017.
“We were able to grow our businesses in local currencies, improve our underwriting and expand our customer reach, all while reducing our cost base,” said CEO Mario Greco.
In the second quarter of 2017, where there was no Ogden effect, operating profit was up 13 percent year on year at $1.24 billion.
“The acquisition of the Cover-More Group Limited in Australia, a leading travel insurer, and Halo Insurance Services Limited, a specialist UK-based online rental car insurance platform, expanded the Group’s personal lines offerings and distribution channels while solidifying Zurich’s position as a leading global travel insurance provider," Greco noted.
"In addition, a new and exclusive distribution agreement was signed in May with Standard Chartered to provide life insurance solutions to its customers in the United Arab Emirates. This further underpins Zurich’s position as a leader in bancassurance, while contributing to volumes and margin growth in the Life business.”
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