Zurich Insurance Group (ZURN) Q2 2024 earnings summary

Executive summary

• Achieved record first-half business operating profit (BOP) of USD 4.0 billion (CHF 4 billion), up 7% year-over-year, with strong performance across Property & Casualty, Life, and Farmers segments.

• BOPAT ROE reached a record 25% for the period, reflecting attractive returns on capital and exceeding cycle targets.

• Net income attributable to shareholders rose 21% to USD 3.0 billion, with EPS up 23% to USD 20.8.

• Completed acquisition of 70% of Kotak General Insurance in India and announced agreement to acquire AIG's global personal travel insurance business.

• Group solvency remains strong with SST ratio at 232%, well above the 160% target; share buyback program ongoing.

Financial highlights

• Group BOP up 10% in local currencies and 7% on a reported basis; P&C BOP at USD 2,224 million (up 3% in local currencies), combined ratio at 93.6%.

• Life segment reported all-time high BOP of USD 1,048 million, up 12%, with strong growth in EMEA and 25% year-on-year growth in short-term protection revenues.

• Farmers BOP up 12% to USD 1,115 million; Farmers Exchanges combined ratio improved to 95.2%.

• Net investment return on Group investments at 2.3%, up from 1.8% year-on-year.

• NIAS increased 21% year-over-year, supported by BOP growth, higher net capital gains, and lower restructuring costs.

Outlook and guidance

• Expects to exceed all 2023-2025 financial targets, with EPS CAGR projected above 10% and favorable market conditions supporting growth.

• P&C insurance revenue and Farmers Exchanges GWP expected to grow mid-single digit year-over-year.

• Life FY-24 BOP expected at least in line with record FY-23.

• Ongoing focus on strengthening customer loyalty and expanding the retail customer base.