Zurich sets ambitious targets for 2020-2022
Zurich Insurance Group (Zurich) has outlined ambitious new financial targets for 2020-2022, during which period it will enrich its retail offering and focus on increasing the customer base, while further improving the quality of its commercial portfolio.
Group chief executive officer Mario Greco said: “Our performance over the past three years shows that our strategy is working. Our rapid progress is reflected in a total shareholder return of 96 percent since the start of 2016. We have made Zurich simpler, more agile and efficient, and strengthened the foundations for our long-term success.”
Selective growth and targeted capital allocation together with further improvements in productivity will allow Zurich to target a business operating profit after tax return on equity in excess of 14 percent and increasing over the 2020-2022 period.
This is expected to lead to compound organic growth in earnings per share of at least 5 percent per annum over the period. The group is set to deliver continued high levels of cash remittances, which are expected to be in excess of USD 11.5 billion over the three years, while retaining its strong capital position with an unchanged target Z-ECM ratio of 100 percent-120 percent.
This will continue to support Zurich’s dividend policy, which is unchanged. It targets a pay-out ratio of around 75 percent of net income attributable to shareholders, reflecting sustainable earnings development, and a minimum target of the prior year level.
As the insurance sector transforms, Zurich is preparing for a future of service-focused insurance. After having simplified its operations, the group will shift its focus and investments to applications and products that will enhance the customer experience.
Among Zurich’s new offerings are smart services for business and home protection, health and well-being programs, and travel insurance.
Data insights are increasingly helping Zurich identify customer needs and prevent incidents, expanding the traditional protection offered by insurance.
In commercial, Zurich will further improve the quality of the portfolio and take advantage of improved market conditions to selectively grow the business. The group will increase investment in underwriting capabilities and strengthen its risk selection.
Farmers is a key part of Zurich’s business and has performed strongly over recent years. The Farmers Exchanges, which are owned by their policyholders, will continue their focus on improving customer experience and satisfaction; strengthening agent productivity; and growing in the life and business insurance segments. A priority of the Farmers Exchanges remains the successful expansion into the Eastern United States and the development of new and innovative products.
In retail, Zurich will build on customer and product insights gained over recent years to deepen its relationship with existing customers and build out new customer segments, with the aim to become their preferred insurance provider.
Greco said that Zurich has deepened its customer focus and employee engagement by listening to their needs through regular tailored surveys. The company has worked to empower employees to drive change and given its younger generation a stronger voice in shaping its culture and programs such as the Zurich Innovation Championship for start-ups.
“Employee satisfaction has jumped over the past three years,” he said. “We remain committed to supporting our customers, employees and communities in facing the challenges of a fast-changing world such as climate change and cyber risks. We want the next generation to thrive. Sustainability is not just a story we tell, it is a principle that informs everything we do.
“We will build on our achievements to further transform insurance, using technology to meet changing needs and create rewarding experiences. I’m confident that our strong management team and engaged employees will allow us to deliver innovative and personalized services for our customers and further attractive returns for shareholders.”
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