Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — Zurich Financial Services — analyst event general
21 slides from Zurich Insurance's investor presentation, Jan 25, 2002
Slide 1: General Update
General Update Peter Eckert Group Operations and Business Development Presentation to Analysts January 25, 2002
Slide 2: Disclaimer
Disclaimer This communication is directed only at persons who (i) have professional experience in matters relating to investments or (ii) are persons falling within Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc) of The Financial Services and Markets Act 2000 (Fi
Slide 3: Agenda
Agenda • Overview • Trends in main markets • Efficiency: Group Head Office © Zurich Financial Services 3
Slide 4: Zurich Financial Services in perspective: Transformation
Zurich Financial Services in perspective Successful expansion 1995 2000 Life Non-Life Farmers Non- 12% 88% 24% Life 29% Transformation AM 4% Re Life 5% 38% Strong position in: Strong positions in: Switzerland Switzerland United States United Kingdom 60 46,3 3 2,3 40 2 22,2 0,8 20 20,6 1 0 10,8 0 199
Slide 5: Zurich Financial Services in perspective: Growth Engine
Zurich Financial Services in perspective Growth Engine 2000 2002 Focus • Financial protection Divest Zurich Scudder, & wealth Converium, & accumulation other operations Transformation • Simplified structure Growth Top 5 Growth Strong positions & Growth potential Positions outlook • United States • U
Slide 6: Strong positions in key markets
Strong positions in key markets 2000 UK Life Non-life Premiums $6.2bn $2.4bn Rank 7th 4th Market Share 4.3% 7% Continental Europe* Premiums $13.7bn Rank 5th Market Share 2.7% US Commercial Personal* Life Premiums $8.5bn $11.8bn $4.1bn Rank 4th 3rd Market Share ~4% 6.1% *through Farmers * pro-forma,
Slide 7: Agenda
Agenda • Overview • Trends in main markets • Efficiency: Group Head Office © Zurich Financial Services 7
Slide 8: Zurich North America Corporate Year Trend
Zurich North America Corporate 6 Year Trend - IAS as reported in June, 2001 $ Millions 1998 1999 2000 2001 2002e 2003e Gross Written Premium 6,115 6,436 8,142 will be reported March 21 - 2001 Growth Rates 5.1% 26.3% 20% to 25% per year Net Written Premium 4,384 3,921 5,027 impacted by 9/11 Incurred
Slide 9: Zurich U.S. - Rate Changes
Zurich U.S. - Rate Changes* 1995 to December 2001 1,55 1,50 1,45 Rate Change Index 1,40 1,35 1,30 1,25 1,20 1,15 1,10 1,05 1,00 0,95 0,90 0,85 0,80 0,75 0,70 0,65 1995 1996 1997 1998 1999 2000 2001 Specialties Middle Mkts Corp. Customer Small Business Construction Energy (domestic) *Excludes Empire
Slide 10: Zurich North America Corporate
Zurich North America Corporate Summary • Continued very strong premium growth • Stop Loss Renewed • Combined ratio targets fundamentally unchanged © Zurich Financial Services 10
Slide 11: Farmers: Key Developments
Farmers: Key Developments • 2000 & 2001 were very difficult years in the US personal lines business, with combined ratios of 110% and 112%(1) expected in 2001 • Eastern expansion slowed down to maintain quality of new business • Rate increases have been implemented in 2001, and further increases are
Slide 12: Farmers: Exchanges' capital
Farmers: Exchanges’ capital • Surplus ratio as of September 2001, was 30.5% vs. 30% in June 2001. – This included capital strengthening measures of $500 million from Farmers Group • The Exchanges will record a significant loss for the year 2001, but we are seeing encouraging signs of improvement for
Slide 13: Farmers: Alliances
Farmers: Alliances • Bank of America: exclusive product offering, 4 Pilots underway: • The Financial portal • Offering of exclusive banking and insurance products via the portal • Cross-selling Farmers personal P&C products to Bank of America mortgage customers • Building a retail presence in Bank o
Slide 14: UK Life: Overview
UK Life: Overview • Year of transformation • Major re-organisation and cost-cutting exercise • Focus on improving productivity and quality of ZAN • Strong IFA growth • Joint Ventures / Alliances with Bank of Scotland, Manchester United, and Bristol & West © Zurich Financial Services 14
Slide 15: UK Life: Business volume growth
UK Life: Business volume growth In USD million 2000 2001 % growth New business premiums (AP + SP/10) 1,027 997 2 Split by channel: IFA 286 305 12 Zurich Advice Network 460 413 (6) Ireland and International 174 181 10 UK Other 108 98 (4) Split by product: Pensions 308 323 10 Investment 351 340 2 Life
Slide 16: UK Non-Life: Overview
UK Non-Life: Overview • Continued to grow market share profitably • Rate hardening in Commercial particularly in last 3 months – Claims inflation diluting positive impact • Combined ratio improving and on-track • Awarded General Insurer of the Year by brokers for second year © Zurich Financial Servi
Slide 17: UK Non-Life: Rate increases continued to be strong in 2001
UK Non-Life: Rate increases continued to be strong in 2001 2000 2001 Personal Household 5% 4% Personal Motor 14% 9% Commercial Motor 20% 14% Commercial Liability 12% 30% Commercial Property 5% 23% © Zurich Financial Services 17
Slide 18: Agenda
Agenda • Overview • Trends in main markets • Efficiency: Group Head Office © Zurich Financial Services 18
Slide 19: GHO: Group Governance, Strategic Leadership, Knowledge Exchange
GHO: Group Governance, Strategic Leadership, Knowledge Exchange Old GHO Out-sourced or Services Discontinued Shared Delegated to Business Division or shifted to Center Profit Shared Services or Profit Centers New GHO Eliminate 1. Group New GHO focused on Governance Group Governance, 2. Strategic Str
Slide 20: GHO: Expense-Reduction by USD 172 Mio in 2001
GHO: Expense-Reduction by USD 172 Mio in 2001 (USD millions, gross expenses) 2000 Total 570 2001 Total 398 Reduction: 172 Budget Total 332 2002 Planned Reduction: 238 GHO Expense-Reduction has been achieved by: • Reducing and reallocating functions to Shared Services and to Business Divisions • Redu
Slide 21: Summary
Summary • Strategic divestitures result in a group with a portfolio of strong businesses • Well positioned in Non Life and Life – Short term growth in Non-life, especially in commercial lines, driven by rate increases – Favorable long term trend in Life, especially in Europe • Making progress on the