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Introduction & Market Context
Zurich Insurance Group (OTC:ZFSVF) (SWX:ZURN) presented its half-year 2025 results on August 7, 2025, showcasing record performance across its key business segments. The presentation, titled "Driving Execution," highlighted the company’s successful start to its 2025-2027 strategic cycle with substantial improvements in profitability metrics and continued growth momentum.
Building on the strong Q1 2025 performance reported earlier this year, Zurich’s half-year results demonstrate the company’s ability to maintain growth while improving underwriting quality and strengthening its balance sheet position.
Executive Summary
Zurich reported a record Business Operating Profit (BOP) of $4.2 billion for the first half of 2025, representing a 6% increase compared to the same period last year. This performance was driven by outstanding underwriting results and growth across all major business segments.
As shown in the following key messages slide, the company achieved significant improvements across its business units:
The Property & Casualty (P&C) segment delivered a record performance with BOP of $2.4 billion, up 9% year-over-year, while improving its combined ratio to 92.4%. The Life business reported a BOP of $1.0 billion, up 4% excluding prior year one-offs, with gross written premiums increasing by 14% overall. The Farmers segment also showed strong results with growing policies in force and an impressive surplus ratio of 45.7%.
Detailed Financial Analysis
P&C Performance
Zurich’s P&C business demonstrated significant improvement in its combined ratio across both Commercial and Retail segments. The Group combined ratio improved from 93.6% in HY-24 to 92.4% in HY-25, driven by better risk selection and underwriting discipline.
The following chart illustrates this improvement across segments:
Particularly noteworthy was the dramatic turnaround in North America Motor, where the combined ratio improved from 120.6% in HY-24 to 99.3% in HY-25, a remarkable 21.3 percentage point improvement. This was largely achieved through a 15% rate change implementation, demonstrating the company’s ability to address underperforming segments effectively.
The P&C segment also showed strong growth in gross written premiums, which increased by 7% to $27.1 billion, with an average rate increase of 3%. The growth was particularly strong in EMEA Retail, where BOP grew by 44% from $502 million to $723 million, driven by improved motor results in key markets including Germany, Switzerland, Italy, and Spain.
Life Business Growth
Zurich’s Life business continued its growth trajectory with gross written premiums increasing by 14% on a like-for-like basis to $18.2 billion. The business achieved a record-high Contractual Service Margin (CSM) of $13.3 billion, up 14% in the first half of the year.
The following chart shows the performance of the Life segment:
The Life Protection business grew by 3% like-for-like, contributing $742 million to BOP. The company highlighted several key market developments, including being selected to insure 700,000 members of Australia’s second-largest superannuation fund and growing to over 10% retail market share with a large Group Critical Illness scheme win.
The Life CSM reached its highest ever level, supported by favorable FX movements:
Farmers Segment Results
The Farmers Exchanges showed positive momentum with increasing policy count and outstanding underwriting results. The segment’s combined ratio improved significantly, while the surplus ratio reached a strong 45.7%.
Farmers Management Services (FMS) BOP increased by 3% compared to the prior year, driven by higher gross earned premiums from the Farmers Exchanges and growth in Agency Brokerages. The managed gross earned premium margin remained stable at 7.0%.
Capital Position and Outlook
Zurich maintained a very strong capital position with an SST ratio of 255% as of HY-25, well above its target floor of 160%. This demonstrates the company’s resilience to market volatilities and provides a solid foundation for future growth.
For the remainder of 2025, Zurich provided a positive outlook across all business segments. The company expects insurance revenue to grow by mid-single digit percentage year-on-year, with Life BOP expected to be in line with the record-high level of $2.2 billion achieved in FY-24.
The company is making strong progress toward exceeding its 2023-25 targets, with HY-25 results showing a Core ROE of 26.3% (vs. target of >23%) and Core EPS growth of 51.9% (vs. target of >9% CAGR).
Strategic Initiatives
Beyond the financial results, Zurich highlighted several strategic initiatives aimed at enhancing customer satisfaction and strengthening its market position. The company reported improvements in its transactional Net Promoter Score (tNPS) and brand consideration metrics, indicating positive customer perception.
Zurich also maintained a well-diversified investment portfolio, with a balanced exposure across asset classes and strong credit quality. This conservative approach to investments supports the company’s ability to deliver consistent returns while managing risk effectively.
The company reaffirmed its dividend policy with a NIAS payout ratio of approximately 75%, demonstrating its commitment to rewarding shareholders while maintaining financial flexibility for future growth opportunities.
In conclusion, Zurich Insurance Group’s half-year 2025 results showcase the company’s ability to deliver strong financial performance while improving operational efficiency across all business segments. With a solid capital position and clear strategic direction, Zurich appears well-positioned to continue its growth trajectory and meet or exceed its 2025-2027 targets.
Full presentation:
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