Commercial rate increases of 6% help drive Zurich’s Q1 P&C growth
Zurich’s P&C insurance revenue increased 7% in the first quarter, driven by “strong” growth in commercial business and further price improvements.
Releasing first quarter 2023 results that focus on top line numbers, Zurich said commercial insurance margins improved as a result of higher prices and higher interest rates, partially offset by continued elevated loss cost trends in retail. Average commercial rates were up 6% in the quarter.
P&C insurance revenue totalled €9.4bn, with gross written premiums up 6% to €11.97bn. Zurich achieved average P&C rate increases of 5% in the first quarter.
It said all regions contributed to P&C growth.
P&C gross written premiums rose just 1% in Europe, Middle East and Africa to €5.99bn, with average rate increase of 4%. Zurich highlighted strong performance in the UK and Switzerland. Insurance revenue rose 2% in Europe, Middle East and Africa to €3.97bn.
Premiums were up 10% in North America to €4.86bn on rate rises of 10%. Insurance revenue in North America rose 11% to €4.3bn.
“Strong growth across all lines of business was supported by further rate increases, which more than offset Zurich’s actions to reduce exposure to natural catastrophe losses,” said Zurich.
P&C premiums also rose 10% in Asia Pacific to €885m, with rates up 2%. Insurance revenue was up 9% to €842m
Gross written premiums increased 16% in Latin America to €671m, with rates up 8%. Insurance revenue rose 13% to €696m in the region.
Zurich said the rating trend for all regions is stable, with the exception of Latin America where it expects price rises to moderate.
“The group has made a strong start to the new financial cycle. We saw robust growth in property and casualty, with a double-digit increase in premiums in North America, mainly driven by rate increases. Underlying commercial insurance margins have continued to improve but we are being cautious about recognising the full benefit as we gain familiarity with the new accounting standard,” said Zurich’s CFO George Quinn.
“Retail markets are seeing higher prices on renewal, and margins will improve over the course of the year as earned rates start to exceed loss cost trends,” he added.
