European commercial GI profit dips 27%

Steven Lewis Zurich UK chief executive

Zurich’s UK general insurance business made an operating profit of $210m (£131m) for the first nine months of 2011 as the division continues to see benefits of stricter underwriting.  

The operating profit is a 15% increase on the $182m it made in the same period last year.

The division’s underwriting profit increased 66% to $73m (9M2010: $44m) And the combined ratio improved 1.6 percentage points to 96.4% (9M 2010: 98%).

Gross written premiums were down 1% to $2.10bn (9M 2010: $2.12bn).

The improved results came despite the company being hit by claims from the UK riots in August.

These latest results mark a continuing improvement in Zurich UK GI book following corrective underwriting actions in personal lines motor.

The company said that across its European business actions  to improve profitability have resulted in lower premium volumes. The company pushed through overall rate increases of 4% across Europe, with the highest increases seen in the UK, Italy and Spain. The company added that customer retention levels had increased despite the rate hikes.

Europe-wide, Zurich’s commercial general insurance business saw its operating profit fall 27% to $363m (9M 2010: $498m), despite a 10% increase in gross written premium to $4.3bn (9M 2010: $3.9bn). The combined ratio increased 3.8 points to 96.7% (9M 2010: 92.9%).

However, GI personal lines performance across Europe improved strongly, with a five-fold jump in operating profit to $364m (9M 2010: $68m) and a 2.5 point improvement in the combined ratio to 97.5% (9M 2010:100%).

Europe personal lines gross written premium increased 4% to $6.1bn (9M 2010: $5.9bn).