Zurich says it would have made a profit on general insurance business without the Ogden hit
The change to the Ogden rate pushed Zurich’s UK general insurance business into loss in 2017.
The insurer reported Zurich UK GI made a business operating loss of £151m, but said that without the Ogden impact it would have made a profit.
The UK GI business reported a gross written premium for the year to £2.367bn, in line with £2.366bn a year earlier.
Combined ratio was 110.9%, but without the discount rate change it would have been 102.3%.
“Zurich’s UK results for 2017 are adversely impacted by a number of factors, although the underlying business performance remains strong,” the company said.
“While many providers were able to absorb the change to the personal injury discount rate in 2016, the effect of the Ogden rate change distorts the General Insurance result for Zurich in 2017,” the company said.
“Excluding these one-off impacts, Zurich’s UK business would show a profit for 2017.”
The parent group reported 2017 net income fell 6 % to $3bn, hit by a record year for natural disaster claims. That beat market forecasts of $2.56bn. The global insurer also announced a share buyback of about $1bn.
“We are progressing steadily on every target we announced,” chief executive Mario Greco told Bloomberg in an interview. “Of course our ambition is to exceed the targets, not just to deliver on them.”
Business operating profit at the property and casualty unit dropped by $892m to $1.5bn, hit by $700m losses from hurricanes Harvey, Irma and Maria.
Combined ratio was 100.9%.