Zurich predicts rate increases
International insurance group Zurich expects recent catastrophe losses to drive rate increases across its business, which have otherwise have experienced only flat to decreased pricing in 2017.
In a trading update on Thursday, Zurich’s chief financial officer George Quinn said: “I am pleased with the development of our businesses in the year to date, particularly against a challenging industry backdrop in the third quarter. We expect the third-quarter natural catastrophe events to drive improvements in pricing across our business.”
For the first nine months of 2017, Zurich’s P&C premium rates increased by just 1%, mainly driven by Europe, Middle East and Africa (EMEA) business, where pricing was 2% higher. Zurich said pricing for EMEA is now stable but slightly decreasing in the US and for P&C rates overall.
The Swiss insurance group’s nine-month P&C gross written premiums increased 1% on a like-for-like basis, with improved new business and customer retention. After adjusting for acquisitions and disposals, overall P&C premiums declined 2% in US dollar terms.
P&C gross written premiums in EMEA – excluding the sale of Zurich’s non-life business in South Africa, Morocco and the Middle East – declined by 2%. The insurer reported lower premiums in Germany, the UK and Spain.
Gross written premiums in the US were flat compared to the prior year period, with growth in higher margin lines offsetting declines in large commercial.
Zurich’s trading update did not include earnings, but the insurer restated its earlier estimate for third-quarter hurricane losses.
On 19 October, Zurich said its third-quarter losses from Hurricanes Harvey, Irma and Maria will be about $700m net of reinsurance and before tax.
