Improved underwriting and cost management help cut COR to 95.3% in year to date
Zurich’s general insurance business reported an operating profit of $2.12bn (£1.34bn) in the first nine months of 2013, up 2% on the $2.09bn it reported in the same period last year.
The Swiss insurance group attributed the increase to improved underwriting and expense management, which offset claims from severe weather events and other large losses, as well as a reduction in investment income.
The company had claims from the floods and hail in Europe, and tornadoes and floods in North America.
A further reason for the year-on-year improvement was that the company’s German non-life business was hit by a one-off charge in the third quarter of 2012 when it had to strengthen reserves.
The combined operating ratio (COR) improved by one percentage point to 95.3% (first nine months of 2012: 96.3%).
Zurich’s general insurance gross written premium (GWP) and policy fees increased 3% to $28.2bn in the first nine months of 2013 from $27.3bn in the same period last year.
The insurer said it achieved growth in all markets except Europe, where economic pressures in key markets and focused underwriting actions lowered GWP.
Zurich’s overall group operating profit increased by 3% to $3.6bn (first nine months of 2012: $3.5bn) and profit after tax rose 2% to $3bn from $2.9bn.
Group chief executive Martin Senn said: “We delivered a solid operating profit in all core segments for the first nine months of 2013.
“Against the backdrop of a fragile global economic recovery and persisting low interest rates, we remained focused on our strategy, growing our business in emerging markets while delivering a resilient performance in mature markets.”
Zurich’s group results also indicate a strong improvement in the company’s UK general insurance business in the first nine months of 2013.
Operating profit was up 74% to $176m in the first nine months of 2013 from $101m in the same period last year.
The COR improved by 5.3 percentage points to a profitable 95.3% from 100.6%. The main cause was a 3.9 point improvement in the loss ratio to 66.4% from 70.3%.
However, GWP was down 3.5% to $1.9bn from $2bn.
More details on the UK general insurance performance can be found here.