Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — Zurich Financial Services — 9M 2006 Earnings Presentation
25 slides from Zurich Insurance's earnings presentation, Nov 16, 2006
Slide 1: Results Reporting for the Nine Months to September 30, 2006
Results Reporting for the Nine Months to September 30, 2006 Analyst presentation Zurich, November 16, 2006
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 Nine Months to September 30, 2006 Patrick O’Sullivan • Q&A 3 © Zurich Financial Services - Results Reporting for the Nine Months to September 30, 2006 - November 16, 2006
Slide 4: Introduction
Introduction James J. Schiro Chief Executive Officer November 16, 2006
Slide 5: 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 • The 2006 target is well on track. 2007 to 2009: • We increase the 2007 target to USD 700m. USD 2 billion • Developing our three year plan, we USD expect benefits of USD 2 billion from 700m 2007 to 20
Slide 6: Results for the Nine Months to September 30, 2006
Results for the Nine Months to September 30, 2006 Patrick O’Sullivan Group Finance Director November 16, 2006
Slide 7: Financial highlights
Financial highlights in USD millions 2006 2005 Change for the nine months ended September 30 Business operating profit 4,286 2,863 50% Net income attributable to shareholders 3,253 2,256 44% General Insurance combined ratio 94.8% 100.9% 6.1pts Global Life new business profit margin1 19.3% 16.3% 3.0p
Slide 8: Business operating profit by segment
Business operating profit by segment in USD millions 2006 2005 Change for the nine months ended September 30 General Insurance 2,778 1,354 105% Global Life 825 830 -1% Farmers Management Services 919 926 -1% Other Businesses 432 305 42% Corporate Functions -668 -552 -21% Total 4,286 2,863 50% 8 © Zu
Slide 9: Top line development by segment
Top line development by segment in USD millions 2006 2005 Change Change for the nine months ended September 30 in LC1 Gross written premiums and policy fees General Insurance 26,329 25,816 2% 3% Global Life (incl. insurance deposits)2 15,678 14,766 6% 8% Other Businesses 1,693 2,694 -37% -37% Annual
Slide 10: General Insurance – key performance indicators
General Insurance – key performance indicators Business Operating Profit Combined ratio (%) Global 94.8 in USD millions 2006 2005 Change Corporate 107.9 for the nine months ended Sept. 30 NA 95.9 Global Corporate 527 -6 nm Commercial 104.9 North America Commercial 892 261 242% Europe 92.6 General Eu
Slide 11: Development of Reserves for Losses and Loss Adjustment Expenses (LAE)
Development of Reserves for Losses and Loss Adjustment Expenses (LAE) in USD millions 2006 2005 Net reserves for losses and LAE, as of January 1 46,194 43,487 Net losses and LAE paid -14,012 -13,023 Net losses and LAE incurred - Current period 15,926 16,982 - Prior years -78 161 Other movements (FX,
Slide 12: Global Life – key performance indicators
Global Life – key performance indicators in USD millions 2006 2005 Change Change for the nine months ended September 30 in LC1 Annual Premium Equivalent (APE) 1,669 1,624 3% 14% New business profit, after tax 322 264 22% 33% New business profit margin, after tax2 19.3% 16.3% 3.0pts Business operatin
Slide 13: Global Life – new business indicators
Global Life – new business indicators in USD millions APE APE Change Change NBP2 NBP2 Change for the 9 months ended Sept. 30 2006 2005 in LC1 2006 2005 United States 81 81 0% 0% 44 51 -14% United Kingdom 581 564 3% 15% 72 52 38% Germany 310 369 -16% -4% 55 60 -8% Switzerland 59 71 -17% -5% 14 3 367%
Slide 14: Farmers Management Services – key performance indicators
Farmers Management Services – key performance indicators in USD millions 2006 2005 Change for the nine months ended September 30 Management fees and other related revenue 1,589 1,538 3% Business operating profit 919 926 -1% Gross operating margin 50.7% 52.8% -2.1pts 14 © Zurich Financial Services -
Slide 15: Farmers Exchanges – key performance indicators
Farmers Exchanges1 – key performance indicators in USD millions 2006 2005 Change for the nine months ended September 30 Gross written premiums 11,384 11,028 3% Net underwriting result 271 92 195% Combined ratio 96.0% 97.9% 1.9pts Adjusted combined ratio2 89.2% 91.1% 1.9pts Surplus ratio 37.7%3 36.6%
Slide 16: Other Businesses and Corporate Functions – Business Operating Profit contribution
Other Businesses and Corporate Functions – Business Operating Profit contribution in USD millions 2006 2005 Change for the nine months ended September 30 Other Businesses: Farmers Re 135 129 5% Centre 167 112 49% Other 130 64 103% Total Other Businesses 432 305 42% Corporate Functions -668 -552 -21%
Slide 17: Investment performance of Group investments
Investment performance of Group investments in USD millions 2006 2005 Change for the nine months ended September 30 Net investment income 5,849 5,886 -1% Net capital gains on investments and 1,130 1,720 -34% impairments of which attributable to shareholders 813 745 9% Net investment result 6,979 7,6
Slide 18: Q&A
Q&A 18 © Zurich Financial Services - Results Reporting for the Nine Months to September 30, 2006 - November 16, 2006
Slide 19: Appendix
Appendix 19 © Zurich Financial Services - Results Reporting for the Nine Months to September 30, 2006 - November 16, 2006
Slide 20: 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 33% Europe General USD 500m USD 500m USD 500m USD 500m Insurance 5% 18% 18% Claims 30% 34% 23% 16% 30% North America Commercial 25% 33% 40% 20% U/W 36% 5% 13% 11% Global Corpo
Slide 21: Farmers Exchanges – financial highlights
Farmers Exchanges1 – financial highlights in USD millions 2006 2005 5'000 40% for the 9 months ended Sept. 30 4'800 38% Gross written premiums 11,384 11,028 4'600 4'400 36% Net underwriting result 271 92 4'200 Net organic surplus generated 459 315 4'000 34% Surplus note repayment2 -107 - 3'800 32% 3
Slide 22: Farmers Exchanges – gross written premiums by line of business
Farmers Exchanges – gross written premiums by line of business in USD millions 2006 2005 Change for the nine months ended September 30 Auto 5,876 5,816 1% Homeowners 3,074 2,847 8% Commercial P&C 887 852 4% Workers’ Compensation 291 363 -20% Specialty 1,157 1,067 8% Other 99 83 19% Total 11,384 11,0
Slide 23: Farmers Exchanges – gross written premium growth by quarter
Farmers Exchanges – gross written premium growth by quarter gaining momentum 6% 5.7% 5.3% 4% 3.6% 2.9% 2.6% 2% 1.4% 0% Q1-2006 Q2-2006 Q3-2006 GWP Growth GWP Growth, ex Work Comp. 23 © Zurich Financial Services - Results Reporting for the Nine Months to September 30, 2006 - November 16, 2006
Slide 24: Farmers Exchanges – combined ratio by line of business
Farmers Exchanges – combined ratio by line of business in USD millions 20061 20051 Change for the nine months ended September 30 Auto 99.7% 98.2% -1.5pts Homeowners 89.2% 86.4% -2.8pts Commercial P&C2 93.7% 99.3% 5.6pts Workers’ Compensation 95.6% 95.8% 0.2pts Specialty 92.1% 106.0% 13.9pts Total 96
Slide 25: Farmers Exchanges – development of the combined ratio
Farmers Exchanges – development of the combined ratio Quarterly combined ratio 115% 110% California wildfires 105% Florida Rita hurricanes 100% Katrina 95% 90% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2002 2003 2004 2005 2006 25 © Zurich Financial Services - Results Reporting for the
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