The FINANCIAL -- Gross written premiums in Property & Casualty for the first nine months of 2018 grew 2% in U.S. dollar terms and were stable on a like-for-like basis. Growth in Asia Pacific and Latin America was partially offset by planned actions focused on profitability in North America. Overall the Group saw rate increases of around 3% over the period.
In EMEA, gross written premiums increased 5% in U.S. dollar terms and remained flat on a like-for-like1 basis, with growth in commercial business in Switzerland, and in Portugal, offset by reductions in Germany and the UK. Gross written premiums for North America were down 1% compared to the prior year period. In line with the Group’s strategy, this was mainly driven by planned reductions in less profitable lines of business.
In Asia Pacific, premiums were up 15% on a like-for-like1 basis with around two thirds of the increase resulting from growth in the Australian travel business, with the balance largely resulting from growth in Japan and Malaysia. In Latin America, gross written premiums increased by 7% on a like-for-like1 basis driven by the retail business in Brazil and Argentina.
Weather and natural catastrophe losses over the first nine months were slightly above expected levels. In the fourth quarter, losses related to Hurricane Michael are estimated to be approximately USD 175 million.
Life new business annual premium equivalent (APE) volumes increased by 25% on a like-for-like1 basis in the first nine months after adjusting for currency and the disposal of the UK workplace savings business, with growth of 3% as reported.
In EMEA, like-for-like1 growth of 16% was driven by an overall strong performance, in particular by the joint venture with Banco de Sabadell S.A. in Spain, together with Italy, Switzerland and the UK. North America grew 30% as a result of improved volumes of corporate protection business.
In Asia Pacific all countries contributed to growth of 22%, while Latin America saw growth of 46% as a result of winning a tender for a large corporate protection contract in Chile.
New business value increased 4% and 6% on a like-for-like1 basis, with volume growth and positive changes to economic assumptions offset by business mix.
The new business margin improved by 0.1 percentage points to 23.3%.
The Farmers Exchanges2, which are owned by their policyholders, continued to deliver top-line growth in the first nine months of the year with the key customer metrics of Net Promoter Score and retention improving further in the most recent quarter.
In the first nine months, gross written premiums from continuing operations3 were up 4%, with growth across all books of business. The Uber commercial rideshare insurance accounted for approximately one percentage point of the growth. Growth was also supported by the continued delivery of the Farmers Exchanges2 expansion in the Eastern U.S., with gross written premiums increasing 16% in the expansion states. In July 2018, the Farmers Exchanges2 opened for business in Florida.
As in previous quarters, top-line growth in continuing operations3 was partially offset by the run-off of discontinued operations. The run-off is largely complete and the drag on reported top-line growth is expected to reduce steadily over the next four quarters.
The Farmers Exchanges2 combined ratio for the nine months showed improvement compared to the prior year as a result of a reduction in the underlying combined ratio (excluding catastrophes) and lower natural catastrophe losses. The surplus ratio stood at 39.7% at the end of September.
Farmers Management Services (FMS) management fees grew 1% compared to the prior year period, in line with the development of gross earned premiums within the Farmers Exchanges2.
Farmers Life new business APE was down 3% year-on-year, while new business value increased 27%, driven by updated operating assumptions, lower acquisition expenses and the reduction in U.S. corporate tax rates.
As of September 30, 2018, the Z-ECM ratio was estimated at 134%4, stable compared to June 30, 2018.