Zurich Insurance Group has reported a record life business operating profit (BOP) in the first six months of 2024.
Life BOP was up 12% to $1,048m, an all-time high for the first half with growth primarily driven by EMEA, which benefited from higher fees, investment result, favourable experience in Switzerland, the UK and Italy, and a non-recurring benefit of approximately $50m related to the non-completion of the disposal of a legacy Life back book in Germany.
BOP also increased in Asia Pacific driven by a higher contractual service margin (CSM) and more favourable claims experience.
Life insurance new business premiums increased 3% in US dollar terms and 5% on a like-for-like basis to $8,510m, driven by Zurich’s preferred lines of protection and unit-linked.
Protection new business premiums increased 18% year-on-year on a like-for-like basis to $3,074m, driven by growth in EMEA and Asia Pacific, most notably in the UK and in Japan.
Insurance revenues for short- term protection products increased 12% on a like-for-like basis driven by strong sales in Latin America.
Unit-linked new business premiums increased 23% year-on-year on a like-for-like basis to $4,599m.
Bank distribution was a key driver of growth, particularly in Latin America, through the joint venture with Banco Santander, and in EMEA through the joint venture with Banco Sabadell and distribution agreement with Deutsche Bank.
Fee revenue generated by investment contracts, which are mainly written in EMEA, grew 9% driven by higher assets under management resulting from favourable market movements and net inflows.
Growth in protection and unit-linked more than offset lower new business premiums in savings, which saw exceptional sales volumes in Spain in the prior-year period.
Mario Greco, group chief executive officer said: “I am very pleased with these results which reflect excellent performance across all our businesses. This will continue to enable us to deliver strong returns for our shareholders. Market conditions have remained more favourable than anticipated and we observe today many opportunities to profitably grow the business.
Overall, group business operating profit (BOP) was up 7% to a record $4.0bn; highest ever return on equity (BOPAT ROE) of 25.0% and net income attributable to shareholders rises 21% to $3.0bn.
Property & Casualty (P&C) BOP of $2.2bn was up 3% on a like-for-like basis, with a combined ratio of 93.6%.
Commercial P&C returns remain highly attractive with a combined ratio of 91.4%, Retail combined ratio at 96.4%.
Farmers achieves highest ever BOP of $1.1bn, up 12%; Farmers Exchanges combined ratio improved by more than 16 percentage points to 95.2%, despite significant catastrophe events.
Zurich further reported a ‘very strong’ capital position with Swiss Solvency Test (SST) ratio at 232%.
