The business operating profit numbers are heading in the right direction for one large insurer, despite what has been described as a tougher insurance environment.
Zurich Insurance Group (
Zurich) reported a business operating profit (BOP) of $3.8 billion, up 7 per cent from the prior year and net income attributable to shareholders (NIAS) of $3 billion, up 3 per cent from the prior year, for the nine months ending September 30.
“Overall, this is a solid set of results,” said Zurich’s Chief Financial Officer George Quinn. “While we continue to make progress, we recognize the environment is getting tougher, underlining the need for us to remain focused on our strategic approach.”
General Insurance recorded a BOP of $2.4 billion, 12 per cent higher than in the prior year period, due to an improved underwriting result. The accident year loss ratio improved 1.8 percentage points compared with the prior year reflecting the benefit of improved underlying loss experience across most of General Insurance as well as reduced levels of catastrophes, weather-related and large industrial losses compared with the same period in 2013.
All dollar amounts are in U.S. figures.
These improvements have been partially offset by a lower level of prior year reserve releases. Gross written premiums were 1 per cent higher at $28.4 billion compared with the same period of 2013.
“We continue to optimize our portfolio, taking action on underpriced risks, and to prioritize investment in the markets and customer segments where we see the most attractive returns,” said Quinn. “Our very strong financial position gives us the capacity and flexibility to manage in a challenging environment.” (continued.)
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According to Zurich’s press release, General Insurance continues to undertake targeted re-underwriting and rate actions on portfolios where returns are not achieving hurdle rates, while investing in growth where there are better opportunities for profit. For the discrete third quarter, rate increases across the portfolio were 2 per cent with both Global Corporate and Europe up, while North America was flat.
Global Life recorded a BOP of $965 million, slightly below the prior year period. Gross written premiums, policy fees and insurance deposits increased by $1.7 billion to $21.3 billion, or by 9 per cent. Overall new business value declined 4 per cent to $757 million year on year as expense allocation and lapse assumption changes mask an improving underlying picture in the regions. Assets under management remained flat, with positive market movements and net inflows of $1.9 billion offset by currency impacts.
