Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — Zurich Financial Services — H1 2006 Earnings Presentation
26 slides from Zurich Insurance's earnings presentation, Aug 17, 2006
Slide 1: Half Year Results Reporting 2006 Analysts' presentation
Half Year Results Reporting 2006 Analysts’ presentation Zurich, August 17, 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 • Half Year Results 2006 Patrick O’Sullivan • Q&A © Zurich Financial Services - Half Year Results Reporting 2006, August 17, 2006 3
Slide 4: Introduction
Introduction James J. Schiro Chief Executive Officer August 17, 2006
Slide 5: The Zurich Way initiatives by function
The Zurich Way initiatives by function USD 500m USD 500m USD 500m 5% 18% 23% 29% Distribution 16% • The 2006 target is 16% Claims well on track 33% • More than 200 36% initiatives in 2006 29% U/W • Rigorous tracking 20% and execution 21% 17% Expenses 19% 9% 9% Other 2005 2006 2007 © Zurich Financial
Slide 6: The Zurich Way initiatives by business division
The Zurich Way initiatives by business division USD 500m USD 500m USD 500m Europe General 30% 34% 29% Insurance Expected contributions to key performance indicators North for 2006/07 America 25% General Insurance: Commercial 20% 47% Combined ratio: 1.5pts p.a. Global Corporate 5% 13% Global Life: AP
Slide 7: Half Year Results 2006
Half Year Results 2006 Patrick O’Sullivan Group Finance Director August 17, 2006
Slide 8: Financial highlights
Financial highlights in USD millions 2006 2005 Change for the six months ended June 30 Business operating profit 2,847 2,305 24% Net income attributable to shareholders 1,957 1,799 9% General Insurance combined ratio 94.8% 96.9% 2.1pts Life Insurance new business profit margin1 17.7% 17.4% 0.3pts 06
Slide 9: Business operating profit by segment
Business operating profit by segment in USD millions 2006 2005 Change for the six months ended June 30 General Insurance 1,781 1,385 29% Global Life 557 536 4% Farmers Management Services 615 609 1% Other Businesses 298 154 94% Corporate Functions -404 -379 -7% Total 2,847 2,305 24% © Zurich Financi
Slide 10: Gross written premiums and policy fees by segment
Gross written premiums and policy fees by segment in USD millions 2006 2005 Change Change for the six months ended June 30 in LC1 General Insurance 18,477 18,635 -1% 2% Global Life 5,133 5,460 -6% -2%2 Other Businesses 1,090 1,913 -43% -43% Other segments and eliminations -95 -54 nm nm Total 24,605
Slide 11: Global Life key performance indicators
Global Life key performance indicators in USD millions 2006 2005 Change Change for the six months ended June 30 in LC4 Business operating profit 557 536 4% Annual Premiums Equivalent (APE) 1,163 1,076 8% 20% New business profit, after tax 205 187 10% 19% New business profit margin, after tax1 17.7%
Slide 12: Global Life new business indicators
Global Life new business indicators Annual Premiums Equivalent and New Business Profit in USD millions APE APE Change Change NBP NBP Change for the six months ended June 30 2006 2005 in LC1 2006 2005 United States 53 54 -2% -2% 26 43 -40% United Kingdom 384 367 5% 16% 35 30 17% Germany 217 252 -14%
Slide 13: Global Life Embedded Value result
Global Life Embedded Value result for the six months ended June 30, 2006 USD millions Return1 Opening Embedded Value (EV) 11,680 Operating profit expected from in-force and net assets2 432 7.6% New business profit2 205 Operating variance and operating assumption changes2 -56 Total operating profit2
Slide 14: General Insurance key performance indicators
General Insurance key performance indicators Business Operating Profit Combined ratio (%) in USD millions 2006 2005 Change Global 93.9 for the six months ended June 30 Corporate 96.4 Global Corporate 364 270 35% NA 95.7 North America Commercial 568 403 41% Commercial 97.7 Europe 92.9 Europe General
Slide 15: Update on North America property catastrophe exposure
Update on North America property catastrophe exposure • Reinsurance − No significant change to structure announced at year end • Primary rates − Rates for US property lines rose with strong increases in CAT exposed areas • Exposure management − Optimized exposure from revised CAT modeling − Rebalanc
Slide 16: Farmers Management Services key performance indicators
Farmers Management Services key performance indicators in USD millions 2006 2005 Change for the six months ended June 30 Management fees and other related revenue 1,054 1,020 3% Business operating profit 615 609 1% Gross operating margin 51.3% 52.6% -1.3pts © Zurich Financial Services - Half Year Re
Slide 17: Farmers Exchanges key performance indicators
Farmers Exchanges1 key performance indicators in USD millions 2006 2005 Change for the six months ended June 30 Gross written premiums 7,435 7,277 2% Net underwriting result 228 296 -23% Combined ratio 95.8% 94.4% -1.4pts Adjusted combined ratio2 89.1% 87.4% -1.7pts Surplus ratio 38.3% 37.4% 0.9pts
Slide 18: Business operating profit Other Businesses and Corporate Functions
Business operating profit Other Businesses and Corporate Functions in USD millions 2006 2005 Change for the six months ended June 30 General Insurance 1,781 1,385 29% Global Life 557 536 4% Farmers Management Services 615 609 1% Other Businesses 298 154 94% of which Farmers Re 87 113 -23% of which C
Slide 19: Investment performance of Group investments
Investment performance of Group investments in USD millions 2006 2005 Change for the six months ended June 30 Net investment income 3,871 4,030 -4% Net capital gains on investments and 507 1,001 -49% impairments of which attributable to shareholders 415 457 -9% Net investment result 4,378 5,031 -13%
Slide 20: Closing remarks
Closing remarks James J. Schiro Chief Executive Officer August 17, 2006
Slide 21: Q&A
@ ZURICH O&A
Slide 22: Appendix
@ ZURICH Appendix
Slide 23: Farmers Exchanges financial highlights
Farmers Exchanges1 financial highlights in USD millions 2006 2005 5,000 40% for the six months ended June 30 4,800 Gross written premiums 7,435 7,277 38% 4,600 Net underwriting result 228 296 4,400 36% Net surplus change (YTD) 304 320 4,200 4,000 34% Ending surplus 4,934 4,466 3,800 32% Surplus rati
Slide 24: 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 six months ended June 30 Auto 3,870 3,858 0% Homeowners 1,914 1,807 6% Commercial P&C 596 573 4% Workers’ Compensation 202 263 -23% Specialty 789 724 9% Other 64 52 23% Total 7,435 7,277 2% © Zurich
Slide 25: Farmers Exchanges Combined ratio by line of business
Farmers Exchanges Combined ratio by line of business for the six months ended June 30 20061 20051 Change Auto 99.9% 97.8% -2.1 pts Homeowners 88.1% 80.1% -8.0 pts Commercial P&C2 95.0% 99.6% 4.6 pts Workers’ Compensation 94.7% 96.6% 1.9 pts Specialty 91.1% 87.2% -3.9 pts Total 95.8% 94.4% -1.4 pts A
Slide 26: Farmers Exchanges Development of combined ratio
Farmers Exchanges Development of combined ratio Quarterly combined ratio 115% 110% 105% California wildfires Florida hurricanes Rita 100% Katrina 95% 90% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2002 2003 2004 2005 2006 © Zurich Financial Services - Half Year Results Reporting 2006, Aug
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