Zurich on track for 2019 targets
Zurich Insurance Group is on track to achieve its 2017-2019 financial targets, management said on Dec. 5, 2018.
Zurich is targeting a BOPAT ROE (business operating profit after tax return on equity) of more than 12 percent by 2019. In the first six months of 2018 it was 12.3 percent.
The insurer also wants to achieve expense savings of $1.5 billion by 2019. It expects to reach $1.1 billion of cost savings in 2018.
Furthermore, Zurich expects a rebalancing of business mix to support its future earnings growth.
“I am very pleased that we are fully delivering on the financial targets that we set out back in 2016,” said group CEO Mario Greco. “Two years into our strategic cycle we are a very different company from the one we were in 2016. We are customer-led, with a more focused footprint and empowered local units and our management team is focused on disciplined execution and expanding the service offerings to deepen our customer relationships and drive profitable growth. Together with our strong capital position and cash generation this supports attractive and growing shareholder returns.”
Zurich has tapped into what it defines as attractive markets through targeted acquisitions while releasing capital from non-core operations. In September 2018, the company acquired a majority stake in Adira Insurance to become the largest foreign P&C insurer in Indonesia. Earlier in March, Zurich entered into an agreement to acquire 19 Latin American traveller assistance providers operating under the Travel Ace and Universal Assistance brands.
The insurer said it is on track to achieve the target of more than $9.5 billion of cash remittances over the three years period. It expects to generate accumulated cash remittances of more than $7 billion for the two years 2017 and 2018, and net cash remittances in excess of $1 billion per annum in life for 2018-2021.
Zurich remains strongly capitalized with an estimated Z-ECM (economic solvency) ratio of 134 percent as of the end of September 2018, well above the 100-120 percent target range, the company said.
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