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Investing.com -- Shares of Zurich Insurance Group AG (SIX:ZURN) climbed 3.2% as the insurer reported a business operating profit that surpassed consensus estimates, largely thanks to its Life segment and a slight edge from its Farmers unit.
The company’s general insurance business operating profit stood at $1,980 million, aligning with consensus despite a slightly worse combined ratio of 94.9%.
The insurer’s natural catastrophe losses came in 20 basis points lower at 3.7%, which helped counterbalance the effects of lower reserve releases and a reduced discounting benefit. Notably, the current year undiscounted loss ratio improved significantly by 1.6% year-on-year (YoY), driven by improvements in both commercial and retail sectors.
Zurich Insurance’s insurance revenues met expectations at $23,346 million, with commercial price increases moderating but still outpacing loss cost trends. Rate hikes for the full year 2024 were reported at 4%, with a 4% increase in EMEA and a 5% rise in North America. The company estimated its wildfire losses at $200 million, including reductions to Farmers Re quota share.
Barclays (LON:BARC) commented on Zurich Insurance’s performance, stating, "Healthy operating performance, limited wildfire impact, strong remittances and arguably excessive solvency. While the print is unlikely to drive consensus up, solvency and higher remittances highlight capital optionality and potential upside to organic targets. We expect a small positive reaction."
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