Zurich 2016 results jump driven by improvements in general insurance
Zurich’s net income increased by 74 percent year-on-year to $3.21 billion in 2016 boosted by higher profitability in general insurance and continued growth in global life and its subsidiary Farmers, according to a company statement.
Group CEO Mario Greco said: “We are very pleased with our results for 2016. Both global life and farmers continued to grow well while general insurance benefited from a stronger underlying performance across all regions. We’ve exceeded our target cash remittances and created a more efficient operation delivering savings of $300 million as promised.
“Taken together, this is quite an achievement and gives us real confidence that our longer term goals are realistic and attainable.”
In general insurance, its gross written premiums and policy fees declined by 3 percent year-on-year to $33.12 billion. However, its combined ratio in general insurance improved to 98.4 percent from 103.6 percent a year earlier.
General Insurance has shown underlying improvement across all regions over the year with both absolute expenses and the loss ratio improving, while also benefiting from a benign year for catastrophe losses, the company said. Ongoing focused underwriting actions and expense initiatives are expected to lead to further improvement over the coming years as areas of weaker performance are being addressed, it added.
In global life, gross written premiums, policy fees and insurance deposits grew by 5 percent year-on-year to $30.35 billion.
Zurich said that in global life it continued building on a unit-linked and protection orientated strategy. It expects general insurance to continue developing well over the coming years.
Growth within its Farmers’ exchanges is being driven by rate increases, resulting in higher fee income, the company said.
Zurich also undertook several selected acquisitions in 2016 which provided new customer segments and products in markets where it was already operating. It purchased for example RCIS, a crop insurer, in April 2016, contributing to Zurich’s US operations.
The company said: “2016 represents a good result with improved profitability across all areas of the group. With a strong balance sheet and cash generation, the group is well positioned to deliver further improvement in 2017 towards the group’s targets and to execute on the strategic priorities outlined at the investor day in November 2016.
The company also commented on its take on some of the political uncertainties in the world, striking a broadly positive note.
“Whilst there are uncertainties in the world, there are also signs of an improving backdrop in terms of growth both in the US and Europe. The precise direction of the new US administration on a range of issues from regulation to corporate taxation and infrastructure investment remains unclear, however, in general it is expected these if implemented to be supportive,” Zurich said.
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