Zurich Insurance price hikes help it weather climate storms
Reuters
Published Aug 10, 2023 04:48AM ET
Updated Aug 10, 2023 10:28AM ET
By Olivier Sorgho
(Reuters) - Zurich Insurance on Thursday reported a better-than-expected half-year operating profit, helped by its Life business and price hikes aimed at mitigating higher insurance claims from unpredictable weather.
Europe's fifth-largest insurer posted a business operating profit (BOP) of $3.72 billion, little changed versus a year earlier, while analysts in a company-provided poll had on average forecast $3.62 billion.
BOP in its Life business grew 11%.
CEO Mario Greco told journalists that Zurich's current trajectory meant the company now intends to exceed the group's financial targets for 2025, which were announced in November.
Insurers globally have faced losses from unexpected events such as natural disasters, the war in Ukraine and COVID-19, and have responded by raising prices or restricting coverage to shield their profits.
Zurich said in a statement that it raised prices by about 6% in the first half.
"The things that we've done to reduce exposure to natural catastrophes in the U.S. I think have had a positive impact in the first six months," finance chief George Quinn told journalists.
He added that the second half of the year is typically more challenging due in part to hurricane season in the United States.
Despite climate change hurting insurers, Zurich earlier this year quit the United Nations-convened Net-Zero Insurance Alliance, joining peers like France's AXA, and Germany's Allianz (ETR:ALVG) which have also departed.
Allianz on Thursday also beat profit expectations.
BOP at Zurich's property and casualty business dropped 6%, due in part to a higher combined ratio - a measure of underwriting profitability in which a level below 100% indicates a profit.
That ratio for the unit grew to 92.9%, from 91.6% a year earlier.
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Written By: Reuters
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