Zurich Insurance Group has set out a new three-year plan with “highest targets ever” at its Investor Day one year ahead of the conclusion of the current cycle 2023-2025.
In a statement today (21 November), the global financial services group spelled out its new financial targets for 2025–2027, namely a core return on equity (ROE) of more than 23%, core earnings per share (EPS) compound annual growth rate of more than 9% and cumulative cash remittances in excess of $19bn.
To deliver these targets, Zurich said it would further strengthen its commercial franchise and mprove Retail profitability and customer loyalty.
The plan will see the business aim to transform life protection into a global business to accelerate its growth. Protection gross written premiums to increase to a compound annual growth rate of 8%, and further growth in capital-light unit-linked business.
Zurich’s protection business, which represents almost 60% of the Life business operating profit, will be consolidated under a single global unit to improve technical excellence in underwriting and pricing, and customer focus.
It would also Support the continued transformation of Farmers to achieve sustainable growth of policies at Farmers Exchanges
Zurich said it is on track to exceed all of its 2023-2025 targets one year ahead of schedule, benefiting from the successful execution of its strategy and a better-than-anticipated market environment.
Over the years, Zurich has grown into a business serving 75 million customers. The Group has significantly invested in Middle Market, Specialties, and travel insurance services.
Digital platforms have been implemented across the Group and Gen AI is already being leveraged at scale by all of its markets, with 541 AI solutions in place and in development to improve performance and simplify customers’ lives.
Zurich has defined new business priorities that build on its unique market position and capitalize on its underwriting expertise to ensure it stays ahead of the market.
Over the past eight years Zurich has delivered an industry-leading total shareholder return of 17%5 per year and distributed more than CHF 28 billion in dividends and share buybacks. Delivery of the new plan targets will support a continued superior shareholder return.
Mario Greco, group chief executive officer said: “Zurich is performing exceptionally well, generating market-leading shareholder returns, but we see new opportunities to accelerate our success story.
“To reflect our growing confidence, we are launching a new three-year plan with the most ambitious targets in Zurich’s history. I’m convinced that we will continue to create significant value for our customers and our shareholders.”
Zurich said its financial targets for 2025–20271 were supported by ambitious business targets including the life protection area covered above.
For commercial insurance, business operating profit is to exceed $4.2bn and Middle Market gross written premiums to surpass $10bn by end of 2027.
Portfolio quality improvement will drive performance supported by actions to strengthen underwriting discipline. Particular focus on Middle Market and Specialties are identified as areas to accelerate growth.
For retail and SME, the plan is to return to a long-term level of profitability and further improve customer loyalty.
Long-term profitability is expected to improve through a combination of strengthened underwriting capabilities across markets, improvements in the portfolio mix, and by leveraging scale and technology assets.
The customer experience would be enhanced through new initiatives to earn loyalty and drive financial impact. Further, with the announced acquisition of AIG’s global personal travel business, which is subject to regulatory approval and expected to close before the end of the year, Zurich will also become a leading global travel insurer serving more than 20 million customers and 200 distribution partners through regional units around the world.
Farmers exceeded the ambitions set in November 2023 by returning to profitability and improving its capital position. The next phase of its business transformation will grow policies in force and the Farmers Exchange expect sustainable mid-single digit gross written premium growth over the next three years.
Financial results in 2025 will be reported relative to both the current and new plans, Zurich said.
