Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — Zurich Financial Services — Q1 2007 Earnings Presentation
28 slides from Zurich Insurance's earnings presentation, May 16, 2007
Slide 1: Results Reporting for the Three Months to March 31, 2007
Results Reporting for the Three Months to March 31, 2007 Analysts’ presentation Zurich, May 16, 2007
Slide 2: 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 predications of or indicate future events, trends, plans or objectives. Forward-looking statements include statements regarding our targeted prof
Slide 3: Agenda
Agenda • Introduction James J. Schiro • Results for the Three Months to March 31, 2007 Dieter Wemmer • Q&A © Zurich Financial Services - Results Reporting for the Three Months to March 31, 2007 - May 16, 2007 3
Slide 4: Introduction
Introduction James J. Schiro Chief Executive Officer Zurich, May 16, 2007
Slide 5: Financial highlights
Financial highlights in USD millions 2007 20061 Change for the three months to March 31 Business operating profit 1,734 1,392 25% Net income attributable to shareholders 1,387 810 71% General Insurance combined ratio 93.3% 94.8% 1.5pts Global Life new business margin2 23.2% 17.7% 5.5pts 03/31/07 03/
Slide 6: Results for the Three Months to March 31, 2007
Results for the Three Months to March 31, 2007 Dieter Wemmer Chief Financial Officer May 16, 2007
Slide 7: Business operating profit by segment
Business operating profit by segment in USD millions 2007 20061 Change for the three months to March 31 General Insurance 1,135 883 29% Global Life 317 285 11% Farmers Management Services 330 319 3% Other Businesses 143 108 32% Corporate Functions -191 -203 6% Total 1,734 1,392 25% 1 Throughout this
Slide 8: Top line development by segment
Top line development by segment in USD millions 2007 2006 Change Change for the three months to March 31 in LC1 Gross written premiums and policy fees General Insurance 10,216 9,861 4% -1% Global Life (incl. insurance deposits)2 5,239 5,357 -2% -10% Other Businesses 616 571 8% 8% Annual Premium Equi
Slide 9: General Insurance – key performance indicators
General Insurance – key performance indicators Business Operating Profit Combined ratio (%) in USD millions 2007 2006 Change Global 92.8 for the three months to March 31 Corporate 92.6 Global Corporate 209 202 3% NA 91.9 Commercial 95.1 North America Commercial 386 303 27% Europe 93.5 Europe General
Slide 10: Development of Reserves for Losses and Loss Adjustment Expenses (LAE)
Development of Reserves for Losses and Loss Adjustment Expenses (LAE) in USD millions 2007 2006 Net reserves for losses and LAE, as of January 1 50,813 46,194 Net losses and LAE paid -4,824 -4,601 Net losses and LAE incurred - Current year 5,438 5,204 - Prior years -160 12 Currency translation effec
Slide 11: Global Life – key performance indicators
Global Life – key performance indicators in USD millions 2007 2006 Change Change for the three months to March 31 in LC1 Annual Premium Equivalent (APE) 628 579 8% 2% New business value, after tax 146 102 43% 36% New business margin, after tax2 23.2% 17.7% 5.5pts Business operating profit 317 285 11
Slide 12: Global Life – emerging markets are growing strongly and profitably
Global Life – emerging markets are growing strongly and profitably in USD millions APE APE Growth NBM1 NBM1 for the three months to March 31 2007 2006 2007 2006 Emerging markets 140 106 32% 23.0% 19.8% of which: South East Asia 66 34 94% 34.7% 37.7% Share of emerging markets in total Global Life APE
Slide 13: Farmers Management Services – key performance indicators
Farmers Management Services – key performance indicators in USD millions 2007 2006 Change for the three months to March 31 Management fees and other related revenues 542 522 4% Business operating profit 330 319 3% Gross operating margin 47.9% 53.3% -5.4pts © Zurich Financial Services - Results Repor
Slide 14: Farmers Exchanges – key performance indicators
Farmers Exchanges1 – key performance indicators in USD millions 2007 2006 Change for the three months to March 31 Gross written premiums 3,811 3,630 5% Net underwriting result 84 160 -48% Combined ratio 96.7% 95.0% -1.7pts Adjusted combined ratio2 90.0% 88.4% -1.6pts Surplus ratio 40.5% 38.1% 2.4pts
Slide 15: Other Businesses and Corporate Functions – Business operating profit contribution
Other Businesses and Corporate Functions – Business operating profit contribution in USD millions 2007 2006 Change for the three months to March 31 Other Businesses: Farmers Re 44 42 5% Centre 29 71 -59% Other 70 -5 nm Total Other Businesses 143 108 32% Corporate Functions -191 -203 6% © Zurich Fina
Slide 16: Investment performance of Group investments
Investment performance of Group investments in USD millions 2007 2006 Change for the three months to March 31 Net investment income 2,062 1,914 8% Net capital gains on investments and 308 300 3% impairments of which attributable to shareholders 152 170 -11% Net investment result 2,370 2,214 7% Net i
Slide 17: James J. Schiro, Chief Executive Officer
James J. Schiro Chief Executive Officer Zurich, May 16, 2007
Slide 18: Q&A
Q&A © Zurich Financial Services - Results Reporting for the Three Months to March 31, 2007 - May 16, 2007 18
Slide 19: Appendix
Appendix © Zurich Financial Services - Results Reporting for the Three Months to March 31, 2007 - May 16, 2007 19
Slide 20: Update on The Zurich Way – revised target of USD 2 billion for 2007
Update on The Zurich Way – revised target of USD 2 billion for 2007 to 2009 Total planned benefits 2007 to 2009: • Developing our three year plan, we USD 2 billion expect benefits of USD 2 billion from USD 2007 to 2009. 700m • 12 major work-streams with over 300 USD USD initiatives 500m 500m • Expec
Slide 21: The Zurich Way initiatives – updated 2007 target
The Zurich Way initiatives – updated 2007 target by function USD 700m by business USD 700m division 21% Growth/ Distribution 31% Europe General USD 500m USD 500m USD 500m USD 500m Insurance 5% 18% 16% Claims 30% 34% 23% 16% 28% North America Commercial 25% 33% 43% U/W 20% 36% 5% 15% 13% Global Corpo
Slide 22: Global Life – new business indicators
Global Life – new business indicators in USD millions APE APE Change Change NBV2 NBV2 Change for the three months to Mar 31 2007 2006 In LC1 2007 2006 United States 29 26 12% 12% 28 14 100% United Kingdom 194 189 3% -8% 20 16 25% Germany 104 111 -6% -15% 28 21 33% Switzerland 29 25 16% 12% 11 2 450%
Slide 23: Farmers Exchanges – financial highlights: strong premium and surplus growth
Farmers Exchanges1 – financial highlights: strong premium and surplus growth in USD millions 2007 2006 6,000 42.0% for the three months to March 31 5,000 40.0% Gross written premiums 3,811 3,630 4,000 38.0% Net underwriting result 84 160 3,000 36.0% Net surplus growth 149 180 2,000 34.0% Ending surp
Slide 24: Farmers Exchanges – gross written premiums by line of business
Farmers Exchanges – gross written premiums by line of business in USD millions 2007 2006 Change for the three months to March 31 Auto 2,018 1,972 2% Homeowners 934 845 11% Commercial P&C 316 289 9% Workers’ Compensation 111 113 -2% Specialty 401 378 6% Other 31 33 -6% Total 3,811 3,630 5% © Zurich F
Slide 25: Farmers Exchanges – strong growth in gross written premiums
Farmers Exchanges – strong growth in gross written premiums 6% 5.2% 5.0% 4.0% 3.9% 4% 3.2% 3.3% 3.1% 2.6% 2.2% 2% 1.4% 0% 3 months Half year 9 months Full year 3 months 2006 2006 2006 2006 2007 GWP growth GWP growth, ex Work Comp. © Zurich Financial Services - Results Reporting for the Three Months
Slide 26: Farmers Exchanges – policies in force growth on the rise
Farmers Exchanges – policies in force (PIF) growth on the rise 800 657 600 (in thousands of policies) 457 400 293 170 200 0 -200 -233 -400 -308 -600 -590 -800 2001 2002 2003 2004 2005 2006 Q1-2007 © Zurich Financial Services - Results Reporting for the Three Months to March 31, 2007 - May 16, 2007 2
Slide 27: Farmers Exchanges – combined ratio remains very strong
Farmers Exchanges – combined ratio remains very strong for the three months to March 31 20071 20061 Change Auto 100.8% 100.3% -0.5pts Homeowners 89.4% 85.6% -3.8pts Commercial P&C2 97.5% 95.5% -2.0pts Workers’ Compensation 95.2% 94.6% -0.6pts Specialty 92.2% 88.2% -4.0pts Total 96.7% 95.0% -1.7pts A
Slide 28: Farmers Exchanges – development of the combined ratio
Farmers Exchanges – development of the combined ratio Quarterly combined ratio 115% 110% California wildfires 105% Rita 100% Florida hurricanes Katrina 95% 90% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2002 2003 2004 2005 2006 2007 © Zurich Financial Services - Results Reporting
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