The COVID-19 pandemic has struck again, with another insurance giant left reeling from its impact.
Zurich Insurance Group has released its interim 2020 results showing business operating profit of $1.7 billion – a 40% drop from last year’s H1 result of $2.8 billion. A large chunk of this can be attributed to the impact of the coronavirus, which was attributed for $686 million of the fall.
Meanwhile, net income attributable to shareholders came in at $1.2 billion – down 42% compared to last year’s $2 billion during the same period. Property and casualty estimated claims from COVID-19 came in at $750 million.
Despite the gloom, CEO Mario Greco was keen to point to strong growth across commercial insurance gross written premiums as an indicator that the group is still well positioned.
“The first half of 2020 has been an unprecedented period with unforeseeable events ranging from a global pandemic and recession, to civil unrest and a higher rate of natural catastrophes,” he said.
“Our business developed well in the first six months of the year in spite of the uncertainties.
“Our commercial business reported strong growth following improvements to the portfolio mix in recent years, and is positioned to further benefit from the improved pricing environment. We continue to expand our digital offering, whose growth contributed to the resilience of our retail business. We launched Zurich WellCare to serve demand for health and wellbeing services, and plan further steps this year to accelerate the digital transformation.
“While our operating environment changes, our goals are the same – we remain confident in the strength of our business, our strategy, and our ability to adapt to changing needs.”
Overall, the company’s P&C combined ratio stood at 99.8% - that’s up from last year’s H1 2019 figure of 95.1%. Gross written premiums in property and casualty were up 4% on a like-for-like basis.
Meanwhile, the Farmers business also saw a series of falls. Gross written premiums across the Farmers Exchanges were down 3% from $10,458 million in H1 2019 to $10,103 million in H1 2020 and the combined ratio climbed from 100% to 101.6%. Business operating profit for Farmers was down 10% from $866 million to $779 million. Again, COVID-19 took its toll.
“Gross written premiums of the Farmers Exchanges grew 0.2% at an underlying level, before COVID-19 premium credits and an adjustment to previously booked gross premiums related to lower expected volumes of commercial rideshare business following shelter-in-place orders by US state governments,” it said in its statement. “The Farmers Exchanges’ combined ratio increased 1.6pts to 101.6% mainly driven by a 1.8pts increase in catastrophe losses.”
It noted that the slump in business operating profit could largely be attributed to around $300 million in premium credits to customers as well as higher operating expenses.