Zurich sees highest profit since 2007 as commercial delivers ‘exceptional’ results

Zurich delivered its highest business operating profit since 2007 last year, helped by big gains in commercial business as the market hardened. The insurer said it expects commercial rate increases to moderate through 2023.

Zurich’s group profit rose 12% in 2022 to €6.45bn. Net income was down 12% to €4.6bn. Zurich said the fall in net income was mainly driven by lower capital gains, net losses on divested businesses and hyperinflation charges related to its Latin American business.

But group business profit was helped by a 14% jump in P&C profit to €3.55bn.

Zurich said P&C numbers were buoyed by “exceptional results in commercial insurance” that secured average rate increases of 8% over the 12 months.

Commercial’s net earned premiums rose by 14% in 2022. Its combined ratio fell again to 92% from 94%. This number has fallen steadily from its peak of 107% in 2017.

Zurich’s P&C combined ratio was the same as 2021 at 94.3%. The company said lower catastrophe and weather-related claims were partially offset by the inflationary environment experienced within its retail and SME business.

P&C gross written premiums rose 8% to €43.36bn, with growth in both commercial insurance and retail across all regions.

Zurich said growth was driven in EMEA by rate increases, higher client retention and improved new business.

North America continued to benefit from higher commercial insurance prices, as well as rising agricultural commodity prices driving top-line growth in crop insurance, it added.

Zurich said P&C premiums in Latin America returned to growth with a strong performance in Brazil after 2021 was hit by Covid-19.

Overall average P&C price rises stood at 6% in the year, supported by the 8% rise in commercial business.

“The P&C business reports today an excellent combined ratio and more importantly shows double-digit top-line growth. Higher risk-adjusted prices in commercial insurance and continued measured progress towards our growth ambitions took P&C gross written premiums to a record level,” said Zurich’s CEO Mario Greco.

He explained that Zurich has exceeded its financial targets for the second consecutive three-year period.

“These were tough years with unexpected challenges, during which we had to stay very agile and focused on our goals. We continued to execute our strategy with strong discipline and successfully drove our results to deliver the targets. I would like to thank all my colleagues, our customers and our partners for this remarkable achievement,” he said.