Zurich predicts stable EMEA P&C market next year

Zurich saw its P&C premiums rise by 8%, or 13% on a like-for-like basis, in the first nine months of this year on the back of rate increases driven by commercial business, but expects market conditions to moderate further, and even stabilise in EMEA, next year. The insurer said it remains on track to beat its financial targets despite an estimated $550m pre-tax loss from hurricane Ian. Zurich said P&C premiums grew “strongly” in the first nine months as rate increase in commercial insurance continued to drive margin expansion. Overall P&C rates were up 6% on average with commercial pricing outstripping this headline figure. North American P&C saw the biggest rate increases, up 8% overall, with premium growth of 14% to $16.24bn. Crop insurance contributed almost 40% of this increase. “North America’s strong performance continues to benefit from rate increases, which have been developing better-than-expected since the beginning of the year and which remain above loss cost trends,” said Zurich. EMEA gross written premiums increased 10% on a like-for-like basis, which factors in currency fluctuation and the strong US dollar, to $14.05bn. Zurich said growth was driven by a strong performance across the region, most notably in the UK, Switzerland and Germany. EMEA rates increased 9% in commercial insurance and 3% in retail insurance, with an overall P&C uptick of 5%. Premiums rose 19% on a like-for-like basis in Asia-Pacific during the first nine months, with an average rate increase of 3%. Rate increase of 5% in Latin America helped premiums jump 22% on a like-for-like basis with “strong growth” in both retail and commercial insurance, said Zurich. It expects commercial insurance rates to remain above loss cost trends into 2023 and is confident that retail pricing will reflect inflation trends. But the insurer seems to think the market will settle down further next year and the overall moderating P&C pricing trend will continue through 2023. It expects the markets in North America and Asia-Pacific to moderate, with buyers in the European Economic Area enjoying even better conditions and a stable market. But Zurich thinks rates will continue their upward trajectory in Latin America. Zurich said Q3 saw “elevated” natural catastrophe losses driven mainly by hurricane Ian, which is expected to cause the company $550m of losses pre-tax. As a result, the group’s catastrophe loss ratio for the first nine months is estimated to be about two percentage points above long-term trends. The company said the higher frequency and severity of natural catastrophe events in recent years underlines the importance of steps it is taking to actively manage its exposure to such events. Zurich’s chief financial officer George Quinn said the group continues to be on track to “exceed its strategic and financial targets for the 2020-2022 cycle”. “We saw robust premium increases across the group, most notably in our North American property and casualty business, where rate increases drove double-digit top-line growth. We expect margin trends in our commercial insurance business to be positive into 2023,” he added.

Zurich predicts stable EMEA P&C market next year

Premium growth fuelled by commercial rate rises in 2022

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