Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — FY2019 Earnings Presentation
76 slides from Zurich Insurance's earnings presentation, Feb 13, 2020
Slide 1: Annual results 2019 – Simple execution, higher ambition
Annual results 2019 – Simple execution, higher ambition Investor presentation February 13, 2020 Zurich Insurance Group
Slide 2: Content
Content MAIN SECTION (use symbols to navigate through the document) APPENDIX (use symbols to navigate through the document) Key highlights Group financial targets Group results and outlook P&C catastrophe reinsurance program Property & Casualty (P&C) Farmers Exchanges Life Group solvency Farmers Gro
Slide 3: 2017-2019 targets exceeded
KEY HIGHLIGHTS 2017-2019 targets exceeded 2017-2019 targets exceeded, best net income result of the last decade, simplified Execution and more flexible operating model delivered Group BOP up 16% with BOPAT ROE of 14.2% driven by improved P&C performance BOP up 38%, with improved accident year combin
Slide 4: We have exceeded all our targets and created significant value for shareholders
KEY HIGHLIGHTS We have exceeded all our targets and created significant value for shareholders TOTAL SHAREHOLDER RETURN IN USD (SINCE JAN 1, 2016)1 2017 – 2019 TARGETS TOTAL (%) CAGR (%) TARGET FY-19 220% ✓ 110% 20% 200% BOPAT ROE >12% 14.2% 180% 160% ✓ 140% 38% 8% EXPENSE USD 1.5bn USD 1.6bn 120% S
Slide 5: Continued strong performance across all businesses
KEY HIGHLIGHTS Continued strong performance across all businesses P&C LIFE FARMERS EXCHANGES2 COMBINED RATIO (%) LIKE-FOR-LIKE BOP GROWTH (%)1 COMBINED RATIO (CR) (%) 99.9% 100.0% 97.8% 96.4% +2% 6.9% 6.8% 4.0% 3.2% 32.4% 32.1% 93.0% 93.2% 63.6% 63.4% -2.3% -2.3% FY-18 FY-19 FY-18 FY-19 FY-18 FY-19
Slide 6: Continued execution on all strategic priorities
KEY HIGHLIGHTS Continued execution on all strategic priorities STRENGTHENED CUSTOMER FOCUS NEW DISTRIBUTION PARTNERSHIPS INNOVATIVE PROPOSITIONS NPS1 RETENTION1 +25% 2 Sales1 +2 0 +3 +5 n.m.3 +4 Winner of Gold award – Efma Accenture Innovation in Insurance Awards -3 +3 REALLOCATION OF CAPITAL SUPPOR
Slide 7: Improved P&C profitability and reduced volatility, with strong improvement in Commercial
KEY HIGHLIGHTS – P&C Improved P&C profitability and reduced volatility, with strong improvement in Commercial P&C BUSINESS MIX (% NEP) AY COMBINED RATIO EXCLUDING LARGE LOSS VOLATILITY (ppts)2 CATASTROPHES (%)1 -2.4ppts 99.1% 96.7% 15% 21% COMMERCIAL 8ppts 27% 30% FY-16 FY-19 28% Q1-14 Q4-15 25% -0.
Slide 8: Our focus on protection business positions our life business well for ongoing low yields
KEY HIGHLIGHTS – LIFE Our focus on protection business positions our life business well for ongoing low yields PROTECTION GWP (USDbn) LIFE GWP SPLIT (%) +18% 8.0 1% 0% 7% 5% 2% 3% 7.0 34% 6.0 51% 5.0 13% 4.0 +14% +7% 99% 91% 93% 3.0 +50% 19% 2.0 52% +13% 1.0 29% 0.0 EMEA Latin America Asia Pacific N
Slide 9: Consistent progress against key strategic priorities
KEY HIGHLIGHTS – FARMERS EXCHANGES1 Consistent progress against key strategic priorities CUSTOMER FOCUS AND AGENT EASTERN EXPANSION INNOVATION PRODUCTIVITY ~+370 Established state COMMERCIAL RIDESHARE & DELIVERY Eastern expansion state # OF STATES ME 2 153 CAPITALIZED Launched in VT NH AGENTS (numbe
Slide 10: Simple execution, higher ambition
KEY HIGHLIGHTS – AMBITION Simple execution, higher ambition ACHIEVEMENTS 2020 – 2022 AMBITION SIMPLIFIED AND FLEXIBLE ORGANIZATION TARGET Delayered structure BOPAT ROE1 >14% Simplified IT landscape Simplified products and services IMPROVED EFFICIENCY CASH USD >11.5bn REMITTANCES Over-delivered on US
Slide 11: FY-19 CFO update
@ ZURICH FY-19 CFO update
Slide 12: Strong performance with Group BOP up 16%
GROUP – BOP Strong performance with Group BOP up 16% BOP BY REGION (USDm) BOP BY BUSINESS (USDm) +16% +16% 5,302 5,302 508 4,566 440 4,566 460 37 1,707 271 1,707 1,643 1,643 1,486 1,548 1,554 1,130 2,878 1,861 2,154 2,085 -52 -800 -1,055 -753 -716 FY-18 FY-19 FY-18 FY-19 Other1 Asia Pacific North Am
Slide 13: Best net income attributable to shareholders of the last decade
GROUP – NIAS Best net income attributable to shareholders of the last decade BOP TO NIAS WALK (USDm) -258m Venezuela 23.6% Tax rate -160 845 -316 +12% -295 359 vs. FY-18 -1,351 237 5,302 4,147 FY-19 BOP Realized capital gains Restructuring costs1 Other2 Loss on disposal Income taxes attributable FY-
Slide 14: 2020 outlook
GROUP – OUTLOOK 2020 outlook • Pricing expected to harden further in 2020 and to exceed loss cost inflation P&C • Mid-single digit growth in NEP expected before FX movements • Investment income (excluding fair value gains) expected to decline modestly Life • Life BOP expected to grow in high single
Slide 15: Strong GWP growth and continued acceleration of rate increases particularly in North America
P&C – TOPLINE Strong GWP growth and continued acceleration of rate increases particularly in North America FY-19 TOPLINE DEVELOPMENT RATE CHANGE (%)1 NORTH AMERICA RATE CHANGE (%)1 GWP Like-for-like FY-19 Rate change outlook (USDm) GWP growth (%)2 9.6% EMEA 14,558 6% 2% Hardening 7.5% 6.6% North Q4
Slide 16: Strong performance in P&C driven by improved underwriting result and positive investment performance
P&C – BOP COMPONENTS Strong performance in P&C driven by improved underwriting result and positive investment performance BOP BREAK DOWN (USDm) BOP CHANGE BY SEGMENT (USDm) COMBINED RATIO (%) +38% -1.4ppts 98 -201 2,878 2,878 150 97.8% 96.4% 479 2,085 922 2,085 266 32.4% 32.1% 574 211 1,932 1,961 65
Slide 17: Lower accident year loss ratio and reduced other underwriting expense ratio drive improvement
P&C – COMBINED RATIO DETAILS Lower accident year loss ratio and reduced other underwriting expense ratio drive improvement AY LOSS RATIO EXCLUDING OTHER UNDERWRITING EXPENSE COMMISSION RATIO (%)3 CATASTROPHES (%)1 (OUE) RATIO (%)3 +0.1ppts 65.7% 16.9% 17.0% 64.7% -0.3ppts 15.9% 63.6% 15.4% -0.6ppts
Slide 18: Excluding elevated crop losses, P&C showed further strong improvement in the accident year combined ratio ex-cat
P&C – CROP BUSINESS Excluding elevated crop losses, P&C showed further strong improvement in the accident year combined ratio ex-cat COMBINED RATIO CROP BUSINESS IN NORTH AMERICA (%)1 P&C AY COMBINED RATIO EXCLUDING CATASTROPHES (%) -1.0ppts 97.5% -1.5ppts 96.5% 96.5% ~95%2 96.1% 95.4% 95.0% FY-09 F
Slide 19: Improvement in underlying combined ratio across all regions, with particularly strong improvement in Commercial
P&C – COMBINED RATIO BY SEGMENT AND CUSTOMER UNIT Improvement in underlying combined ratio across all regions, with particularly strong improvement in Commercial AY COMBINED RATIO (CR) EXCLUDING CATASTROPHES BY SEGMENT (%)1 AY CR EXCL. CATASTROPHES BY CUSTOMER UNIT (%)1 -2.0ppts -2.8ppts -0.9ppts -0
Slide 20: Positive investment performance with an improved running yield
P&C – INVESTMENT RESULT Positive investment performance with an improved running yield INVESTMENT RESULT IN BOP (USDm) INVESTMENT INCOME YIELD INVESTMENT INCOME YIELD OF GROUP INVESTMENTS (%)1 2,171 2.8% 3.0% 1,884 211 FY-18 FY-19 1,932 1,961 BOOK & REINVESTMENT YIELD OF DEBT SECURITIES (%)2 2.8% 2.
Slide 21: Continued strong underlying life performance
LIFE – OVERVIEW Continued strong underlying life performance BOP (USDm) APE (USDm)1 NBM (%) & NBV (USDm)1 +2% -3% like-for-like2 like-for-like2 23.3% 24.1% 25.8% -4% -7% 1,554 1,486 4,868 4,639 +4% 4,331 like-for-like2 319 269 1,117 1,258 1,437 195 1,164 -1% 296 186 204 224 31 231 999 981 976 82 268
Slide 22: Protection and capital efficient savings products account for 85% of APE and 100% of NBV
LIFE – PRODUCT MIX Protection and capital efficient savings products account for 85% of APE and 100% of NBV APE PRODUCT MIX (USDm)1 NBV PRODUCT MIX (USDm)1 4,868 999 976 4,639 981 519 4,331 26 67 82 82 640 154 685 646 167 164 726 714 778 1,277 1,252 1,285 85% 736 737 803 1,698 1,996 1,622 -12 -1 -49
Slide 23: Net inflows impacted by lower volumes; higher AUM balances driven by market movements
LIFE – NET INFLOWS AND ASSETS UNDER MANAGEMENT Net inflows impacted by lower volumes; higher AUM balances driven by market movements NET INFLOWS BY SEGMENT (USDbn) AUM DEVELOPMENT (USDbn) +8% -15% 7.4 275 254 16 -1 6.3 6 38 2.4 44 0.4 116 0.0 3.6 106 4.5 0.5 0.6 105 121 1.7 FY-18 FY-19 Balance as of
Slide 24: Underlying growth in BOP driven by improved margins
LIFE – BOP BY SOURCE Underlying growth in BOP driven by improved margins BOP BY SOURCE OF EARNINGS (USDm) KEY DRIVERS2 FY-19 vs. FY-18 Actual1 L-for-L2 Income from loadings & fees 86% Loadings & fees 2,667 823 3,489 0% 4% and technical margins Inv. margin 690 29% 38% Unit-linked fund based fees -1%
Slide 25: Investment result driven by favorable market environment; ongoing pressure on portfolio yield
LIFE – INVESTMENT RESULT Investment result driven by favorable market environment; ongoing pressure on portfolio yield INVESTMENT RESULT IN BOP GROSS OF PH (USDm)1 INVESTMENT INCOME YIELD INVESTMENT INCOME YIELD OF GROUP INVESTMENTS (%)2 3,821 2.9% 2.7% 3,373 906 338 FY-18 FY-19 3,035 2,915 BOOK & R
Slide 26: Consistent growth at Farmers Exchanges
FARMERS EXCHANGES1 – GROWTH Consistent growth at Farmers Exchanges1 GWP (USDm) NET PROMOTER SCORE3 AND RETENTION (%)4 +2% 20,656 47.6 19,908 20,325 125 17 435 46.1 43.3 82.9% 82.6% 19,473 20,201 20,639 81.7% FY-17 FY-18 FY-19 FY-17 FY-18 FY-19 Discontinued operations2 Continuing operations NPS3 Rete
Slide 27: Continued improvement in Farmers Exchanges surplus ratio
FARMERS EXCHANGES1 – PROFITABILITY Continued improvement in Farmers Exchanges1 surplus ratio COMBINED RATIO (%)2 SURPLUS3 41.5% 38.7% 39.5% 101.6% 99.9% 100.0% 7.3% 6.9% 6.8% 6.0 5.5 5.5 94.3% 93.0% 93.2% FY-17 FY-18 FY-19 FY-17 FY-18 FY-19 Catastrophe losses CR (excl. catastrophe losses) Surplus ra
Slide 28: Stable margin at FMS and continued growth in BOP
FARMERS MANAGEMENT SERVICES – OVERVIEW Stable margin at FMS and continued growth in BOP BOP (USDm) MGEP MARGIN (%)1 1,415 1,424 1,456 7.0% 7.0% 7.0% 26 12 33 1,389 1,412 1,424 FY-17 FY-18 FY-19 FY-17 FY-18 FY-19 Net investment income & other Gross management result © Zurich 1 Margin on gross earned
Slide 29: Strong result at Farmers Life supported by favorable experience; lower earnings at Farmers Re
FARMERS LIFE AND FARMERS RE – OVERVIEW Strong result at Farmers Life supported by favorable experience; lower earnings at Farmers Re reflecting reduced quota share BOP (USDm) FARMERS LIFE NEW BUSINESS APE (USDm)1 91 84 277 82 250 57 15 219 43 NBM (%) & NBV (USDm)2 110% 134% 113% 236 220 113 176 100
Slide 30: Headquarter expenses further reduced, Non-Core impacted by the disposal of legacy liabilities
GROUP FUNCTIONS AND OPERATIONS & NON-CORE BUSINESSES – BOP Headquarter expenses further reduced, Non-Core impacted by the disposal of legacy liabilities GROUP FUNCTIONS AND OPERATIONS BOP (USDm) NON-CORE BUSINESSES BOP (USDm) 37 -310 -268 -449 -443 -716 -753 -52 FY-18 FY-19 FY-18 FY-19 Headquarters
Slide 31: Very strong capital position supported by operating capital generation pre-dividend
GROUP – SOLVENCY RATIOS Very strong capital position supported by operating capital generation pre-dividend Z-ECM AND SST RATIO (%)1 Z-ECM RATIO DEVELOPMENT (%) 240% -2% 217% 221% -2% 220% 216% 204% 200% 196% 14% 185% 189% -9% 129% 180% 3% 124% 160% 140% 132% 129% 127% 125% 124% 122% 121% 120% 114%
Slide 32: Net income and higher unrealized gains drive increase in shareholders’ equity
GROUP – BALANCE SHEET AND CAPITAL STRUCTURE Net income and higher unrealized gains drive increase in shareholders’ equity SHAREHOLDERS’ EQUITY (USDm) CAPITAL STRUCTURE (%)1 +16% 35,004 12% 11% 133 16% 15% -2,819 3,427 4,147 7 30,109 72% 74% FY-18 NIAS Dividend Currency Net Pension FY-19 FY-18 FY-19
Slide 33: Continued strong cash remittances; CHF 20 dividend proposed
GROUP – CASH REMITTANCES AND DIVIDEND Continued strong cash remittances; CHF 20 dividend proposed CASH REMITTANCES (USDbn) DIVIDEND PER SHARE (CHF) +5% 3.7 3.8 20 3.4 19 18 1.5 17 2.5 2.3 1.5 1.1 0.9 1.4 1.2 1.2 0.2 -0.9 -0.8 -0.9 -0.2 -0.1 FY-17 FY-18 FY-19 FY-16 FY-17 FY-18 FY-191 Property & Casua
Slide 34: Disclaimer and cautionary statement
Disclaimer and cautionary statement Certain statements in this document are forward-looking statements, including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives of Zurich Insurance Group Ltd or the Zurich Insurance Group (the ‘Group’).
Slide 35: Appendix
@ ZURICH Appendix
Slide 36: 2020-2022 Financial targets
GROUP – FINANCIAL TARGETS 2020-2022 Financial targets BOPAT ROE1 in excess of 14% and increasing Cumulative cash remittances in excess of USD 11.5bn over 2020-2022 Z-ECM ratio to remain in 100-120% range Compound organic earnings per share growth2 of at least 5% p.a. © Zurich 1 Business Operating Pr
Slide 37: We are focused on continuing to reward our shareholders
GROUP – DIVIDEND POLICY We are focused on continuing to reward our shareholders ZURICH’S DIVIDEND POLICY1 DIVIDEND PER SHARE (CHF) +5% NIAS2 payout ratio of ~75% 20 19 18 17 17 17 17 17 17 17 16 11 Dividend increases based on sustainable earnings growth Minimum target of prior year level FY-08 FY-09
Slide 38: USD 1.6bn of expense savings delivered
GROUP – EXPENSE DEVELOPMENT USD 1.6bn of expense savings delivered EXPENSE DEVELOPMENT (USDbn) BREAKDOWN OF EXPENSE BASE AND SAVINGS (%) USD 10.3bn USD 1.6bn 10.3 10.3 0.5 0.0 -1.6 11% 9.2 18% 59% 40% 41% 31% FY-15 FX & FY-15 M&A Savings FY-19 FY-15 as of FY-19 baseline @FY-19 FX changes Expense bas
Slide 39: Reinsurance program in line with Group risk appetite
P&C – CATASTROPHE REINSURANCE Reinsurance program in line with Group risk appetite GROUP CATASTROPHE REINSURANCE PROTECTION (USDm) 200 115 200 1,000 200 1,000 200 1,000 250 600 433 300 7502 472 600 200 Europe U.S. all perils Rest of world all perils Global aggregate cat treaty all perils1 (incl. ear
Slide 40: Top-line growth across all books of business
FARMERS EXCHANGES1 – GWP, PIF/VIF AND COMBINED RATIO BY LINE Top-line growth across all books of business GWP (USDm) PIF (000’s)2 COMBINED RATIO (%) 20,325 20,656 14,038 17 13,665 245 125 275 504 47 8 406 537 100.4% 1,998 2,120 398 Auto 101.5% 2,542 2,652 3,231 3,279 100.6% Home 99.2% 5,432 5,569 4,
Slide 41: Well diversified capital base by risk type
GROUP – Z-ECM COMPONENTS Well diversified capital base by risk type AFR COMPOSITION (USDbn)1 RBC SPLIT (%)1 Market risk Shareholders equity 35.0 4% 12% Reinsurance credit risk 8% Premium and reserving risk 5% 52% Natural catastrophe risk Dividend accrual -3.1 Life insurance risk 18% Operational risk
Slide 42: Solvency ratios resilient to market movements
GROUP – SOLVENCY RATIO SENSITIVITIES1 Solvency ratios resilient to market movements Z-ECM IMPACT2 SST IMPACT2 Actual value as of HY-19 118% Actual value as of FY-18 221% Interest rate +100 bps 130% Interest rate +100 bps 235% Interest rate -100 bps 97% Interest rate -100 bps 189% USD appreciation +1
Slide 43: Low average debt cost and balanced maturity profile
GROUP – DEBT Low average debt cost and balanced maturity profile DEBT (USDbn) AND AVERAGE DEBT COST (%) MATURITY PROFILE (USDbn)1 12.0 12.0 2.2 2.0 0.6 0.2 1.8 5.2 5.1 1.6 Average debt FY-18 FY-19 0.5 0.8 cost (%) 1.1 Senior 1.4% 1.4% 1.9 0.7 1.6 6.8 6.9 Subordinated 4.9% 4.6% 0.6 0.6 0.4 0.3 1.1 1.
Slide 44: Commentary
@ ZURICH Commentary
Slide 45: Page 3: Key messages
COMMENTARY Page 3: Key messages The Group’s full year 2019 results show a further strong performance, with the Group having exceeded all its 2017-2019 targets, while net income attributable shareholders (NIAS) of USD 4.1bn was at the highest level for the last decade. Business operating profit (BOP)
Slide 46: Page 4: Key highlights – All targets exceeded
COMMENTARY Page 4: Key highlights – All targets exceeded 2019 saw the Group exceed all targets set out for the 2017 to 2019 period creating significant value for the shareholders. In 2019 the Group achieved a further expense savings bringing the cumulative savings for the period 2016 – 2019 to sligh
Slide 47: Page 5: Key highlights – Business performance
COMMENTARY Page 5: Key highlights – Business performance P&C gross written premiums returned to growth over 2019. Growth was 6% on a like-for-like basis, after adjusting for currency movements and closed acquisitions and disposals, and up 2% on a reported basis with the business accelerating over th
Slide 48: Page 6: Key highlights – Strategic priorities
COMMENTARY Page 6: Key highlights – Strategic priorities During 2019, the Group continued to execute against its key strategic priorities. During the year the Group’s customer focus continued to deliver tangible benefits with key customer metrics in the Group´s largest retail markets improved, with
Slide 49: Page 7: Key highlights – P&C
COMMENTARY Page 7: Key highlights – P&C Over 2019 the Group continued to execute against the key strategic priorities of improving profitability while reducing overall volatility of P&C results. The year demonstrates improvements in underwriting and the use of reinsurance have led to a more profitab
Slide 50: Page 8: Key highlights – Life
COMMENTARY Page 8: Key highlights – Life Life continues to progress in line with the Group’s strategy of focusing on higher margin protection business and capital light savings business with the Group well positioned for ongoing low yields. Gross written premiums for protection business have continu
Slide 51: Page 9: Key highlights – Farmers
COMMENTARY Page 9: Key highlights – Farmers Farmers Exchanges have put in place initiatives to achieve all strategic priorities outlined at the 2017 Investor Day and are now well positioned to focus on growth and taking advantage of new opportunities. The shift towards a capitalized agency model is
Slide 52: Page 10: Key highlights – Ambition
COMMENTARY Page 10: Key highlights – Ambition Over the last years the Group has successfully executed against all key strategic priorities and exceeded all targets set in 2016. The Group is now simpler, more agile and efficient. Key businesses as well as the Group culture have also been strengthened
Slide 53: Page 12: Group – BOP
COMMENTARY Page 12: Group – BOP Overall Group BOP increased 16% on a reported basis. EMEA grew 16% despite adverse currency developments, with P&C the largest driver of growth. In P&C results benefited from an improved underwriting performance as well as lower non- technical charges which were highe
Slide 54: Page 13: Group – NIAS
COMMENTARY Page 13: Group – NIAS Net income attributable to shareholders (NIAS) increased 12% in the year, with growth driven by the increase in BOP, higher realized gains and a reduced tax rate which more than offset higher losses on disposal and other charges. Key items outside of BOP included: •
Slide 55: Page 14: Group – Outlook
COMMENTARY Page 14: Group – Outlook Over 2020 the Group expects to show progress against the targets laid out in November 2019. P&C: The Group expects further hardening of pricing over 2020 with price increases expected to remain ahead of loss cost inflation. This is expected to support improved top
Slide 56: Page 15: P&C – Top line
COMMENTARY Page 15: P&C – Top line Gross written premiums in Property & Casualty (P&C) for 2019 increased 6% on a like-for-like basis, after adjusting for currency movements and closed acquisitions and disposals. Strong growth was achieved in all regions. In U.S. dollars gross written premiums grew
Slide 57: Page 16: P&C – BOP components
COMMENTARY Page 16: P&C – BOP components FY-19 P&C BOP was USD 2,878m, 38% higher than in the previous year. The underwriting result increased strongly by USD 348m. In line with this, the combined ratio for FY-19 improved by 1.4 percentage points to 96.4%. Investment income for the year increased by
Slide 58: Page 17: P&C – Combined ratio details
COMMENTARY Page 17: P&C – Combined ratio details The accident year loss ratio excluding catastrophes reduced by 0.3 percentage points compared to FY-18 and 0.7 percentage points when normalizing the FY-19 ratio for the challenging crop year. The reduction is driven by an improved underwriting perfor
Slide 59: Page 18: P&C – Crop business
COMMENTARY Page 18: P&C – Crop business Following strong performances in 2017 and 2018, 2019 was a more challenging year for the crop business in North America. The crop results in 2019 were mainly impacted by claims related to prevented and delayed planting following extreme flooding in the Midwest
Slide 60: Page 19: P&C – Combined ratio by segment and customer unit
COMMENTARY Page 19: P&C – Combined ratio by segment and customer unit The EMEA accident year combined ratio ex-catastrophes of 94.8% for FY-19 was lower than in the previous year, with underlying improvements in the expense ratio the main driver. In North America, the accident year combined ratio ex
Slide 61: Page 20: P&C – Investment result
COMMENTARY Page 20: P&C – Investment result FY-19 investment income rose 1% to USD 1,961m while fair value items of USD 211m increased USD 258m year on year driven by more favorable market developments. Reinvestment yields for debt securities were around 2.4% over the year. The gap to the annualized
Slide 62: Page 21: Life – Overview
COMMENTARY Page 21: Life – Overview Life continued to deliver a strong underlying performance against a high prior year comparative. Life BOP decreased 4% to USD 1,486m due to strengthening of the U.S. dollar compared to the prior year and increased 2% on a like-for-like basis, after adjusting for c
Slide 63: Page 22: Life – Product mix
COMMENTARY Page 22: Life – Product mix The Group continues to focus on protection, unit-linked and corporate pension business, with these products accounting for 85% of APE sales. Compared to FY-18, this represents a 1 percentage point reduction. Protection business contributed 82% of the overall NB
Slide 64: Page 23: Life – Net inflows & AuM
COMMENTARY Page 23: Life – Net inflows & AuM Net inflows decreased 15% compared to the prior year. The decline was primarily driven by lower volumes of savings business in EMEA partially offset by higher volumes of unit-linked business in Latin America. Assets under management increased 8% mainly du
Slide 65: Page 24: Life – BOP by source
COMMENTARY Page 24: Life – BOP by source The Group’s life business continued to be driven by stable income streams on a, sources of earnings view, with 86% of income coming from loadings and fees together with technical margins on a like-for-like basis, after adjusting for currency movements and clo
Slide 66: Page 25: Life – Investment result
COMMENTARY Page 25: Life – Investment result Life investment result, which is gross of policyholder sharing, increased by 13% to USD 3.8bn in U.S. dollars, driven mainly by favorable market developments compared to prior year. © Zurich February 13, 2020 Annual results 2019 66
Slide 67: Page 26: Farmers Exchanges – Growth
COMMENTARY Page 26: Farmers Exchanges – Growth The Farmers Exchanges showed continued growth in top-line through 2019. Gross written premiums increased by 2% with growth across all lines of business. Growth was also supported by the expansion of the Farmers Exchanges in the Eastern U.S., with gross
Slide 68: Page 27: Farmers Exchanges – Profitability
COMMENTARY Page 27: Farmers Exchanges – Profitability The Farmers Exchanges combined ratio stood at 100.0%, broadly in line with the prior year. The Farmers Exchanges’ surplus ratio increased by 2 percentage points to 41.5%. This was driven by organic growth of surplus which more than offset the imp
Slide 69: Page 28: FMS – Overview
COMMENTARY Page 28: FMS – Overview Farmers Management Services (FMS) BOP increased 2% compared to the prior year. This was driven by 1% growth in the gross management result, in line with Farmers Exchanges gross earned premiums, and USD 19m of favorable mark to market impact on a deferred compensati
Slide 70: Page 29: Farmers Life and Farmers Re – Overview
COMMENTARY Page 29: Farmers Life and Farmers Re – Overview Farmers Life BOP of USD 236m was USD 59m higher than in the prior year. Results benefited from a combination of continued growth in the in-force portfolio, favorable experience and a positive year over year impact from annual assumption upda
Slide 71: Page 30: Group Functions and Operations & Non-Core Businesses – BOP
COMMENTARY Page 30: Group Functions and Operations & Non-Core Businesses – BOP The business operating loss reported under Group Functions and Operations improved by USD 36m to USD 716m. This was driven by a USD 43m reduction in headquarter expenses, while Holding and Financing costs remained in line
Slide 72: Page 31: Group – Solvency ratios
COMMENTARY Page 31: Group – Solvency ratios The Group’s balance sheet remains very strong, with Group’s Z-ECM ratio estimated at 129% as of the end of December. Strong operational capital generation from the businesses added 14 percentage points offset by 9 percentage points of dividend accrual. Mar
Slide 73: Page 32: Group – Balance sheet and capital structure
COMMENTARY Page 32: Group – Balance sheet and capital structure Shareholders’ equity increased by USD 4.9bn over the year mainly due to an increase in unrealized gains and losses, with net income of USD 4.1bn largely offset by the payment of the Group dividend. The Group capital structure remains br
Slide 74: Page 33: Group – Cash remittances & dividend proposal
COMMENTARY Page 33: Group – Cash remittances & dividend proposal Conversion of earnings into distributable cash remains strong bringing the cumulative total for the 2017 – 2019 period to USD 10.9bn and exceeding the target of USD 9.5bn. During the year the Group saw net remittances of USD 3.4bn, in-
Slide 75: For further information
For further information CALL US VISIT OR FOLLOW US Investor Relations and Rating Agency Management Richard Burden +41 44 628 96 40 Francesco Bonsante +41 44 628 00 68 Samuel Han +41 44 625 32 57 Michèle Matlock +41 44 625 28 50 Gianni Vitale +41 44 625 48 26 Events Patricia Heina +41 44 625 38 44
Slide 76: Calendar
CALENDAR: • March 18-19, Morgan Stanley European Financials Conference, London • March 30-31, HSBC West Coast Conference, San Francisco • April 1, Annual General Meeting • May 14, Update for the three months ended March 31, 2020 • May 19, Zurich Insights – Investor event, Zurich • May 26, Deutsche B
Zurich Insurance Group — FY2019 Earnings Presentation on 6ix