The FINANCIAL — Zurich Insurance Group (Zurich) reported a business operating profit (BOP) of USD 3.6 billion and net income attributable to shareholders (NIAS) of USD 3.0 billion for the nine months ended September 30, 2013.
General Insurance business operating profit increased, as an improved underwriting result and expense management compensated for a continued reduction in investment income and losses from severe weather-related events and other large losses. The reported combined ratio improved by 1.0 percentage point to 95.3%, according to Zurich Insurance Company Ltd.
Global Life profitability continued to improve, as a growing contribution from Zurich Santander offset a decrease in other regions while Europe was largely flat. Farmers business operating profit increased, driven by an improved underwriting result at Farmers Re. The Group preserved its strong capital position with shareholders’ equity at USD 32.1 billion and the solvency position, as measured under the Swiss Solvency Test, further strengthened in the first half of 2013.
General Insurance business operating profit increased by USD 39 million to USD 2.1 billion, reflecting an improved underwriting result including expense management, according to Zurich Insurance Company Ltd. This was partly offset by the continued reduction in investment income and losses from severe weather-related events and other large losses. These included losses related to floods and hail in Europe, and tornadoes and floods in North America. The combined ratio improved by 1.0 percentage point to 95.3% compared to the prior-year period. The 2012 result was adversely affected by one-off charges taken in the German business in the third quarter.
General Insurance gross written premiums (GWP) and policy fees increased by USD 873 million to USD 28.2 billion, or by 3% in U.S. dollar terms and 4% on a local currency basis, according to Zurich Insurance Company Ltd. Growth was achieved in all markets except Europe, where economic pressures in key markets and focused underwriting actions resulted in a decline in GWP. Global Corporate delivered strong premium growth in Europe and North America, where the improving market environment continued to support premium and rate increases. Premiums in International Markets increased as these businesses continued to execute growth strategies.
Global Life business operating profit increased by USD 11 million to USD 978 million, or by 1% in U.S. dollar terms and 4% on a local currency basis with an increase in Zurich Santander offset by reductions within other regions.
Net expense and risk margins improved but the net investment margin fell significantly due to persistently low investment yields in all regions, especially in North America and the larger European operations of the UK, Germany and Switzerland.
Global Life gross written premiums, policy fees and insurance deposits decreased by USD 1.6 billion to USD 19.6 billion, or by 7% in U.S. dollar terms and on a local currency basis. Continued growth in gross written premiums in the higher margin protection business, particularly in Zurich Santander and the UK, was more than offset by an expected reduction in insurance deposits in the UK from single premium Private Banking Client Solutions products.
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