Zurich Insurance posts solid Q1 as rate momentum begins to ease

Published 08/05/2025, 08:30
© Reuters.

Investing.com -- Zurich Insurance Group AG (SIX:ZURN) on Thursday reported steady first-quarter results, with growth in key segments and performance largely in line with expectations. 

The group continues to manage well through an early-stage shift in the insurance cycle, though signs of rate moderation are emerging.

Property and casualty gross written premiums rose 5% year-over-year on a like-for-like basis to $13.3 billion. 

Rate increases totaled 4%, including 5% in retail and 3% in commercial, down slightly from year-end trends.

In North America, GWP rose about 1%, with a 6% rate increase, up from 5%, driven by mid-market and specialty strength. 

The company expects pricing to moderate in both EMEA and North America. Retail margins appear to be improving, while commercial margins remain stable.

Life premiums rose 18% to $9.4 billion, led by unit-linked products, especially through Zurich’s Sabadell joint venture in Spain, and by protection sales. 

Short-term contracts totaled $688 million, up 1% amid currency headwinds. New business contractual service margin rose 4% to $275 million, or 8% on a like-for-like basis. The new business margin declined to 5.4% from 6.6% due to mix changes.

Farmers Exchanges reported $7.4 billion in GWP, about 1% ahead of consensus and up 5% year-over-year. Growth came from increased new business and higher retention. 

“We think the update reads well but there is enough for the bears to cling on to - specifically prices are expected to moderate,” said analysts at Barclays (LON:BARC) in a note.

The surplus ratio rose to 42.6%, despite California wildfire losses, and remains above the 34%–38% target range. 

Fee income at Farmers Management Services increased 3% on stronger premiums and brokerage activity.

The Swiss Solvency Test ratio improved to 256%, up five percentage points from the prior quarter and six points above consensus. Higher interest rates and tighter spreads offset the negative impact of U.S. dollar strength.

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