Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — H1 2020 Earnings Presentation
76 slides from Zurich Insurance's earnings presentation, Aug 13, 2020
Slide 1: Half year results 2020
Half year results 2020 Investor and media presentation August 13, 2020
Slide 2: Content
Content MAIN SECTIONS OTHER IMPORTANT INFORMATION (use symbols to navigate through the document) (use symbols to navigate through the document) Key highlights Disclaimer Group results and outlook Dividend policy Property & Casualty (P&C) Farmers Exchanges details by line of business Life P&C reinsur
Slide 3: Key messages
KEY HIGHLIGHTS Key messages Solid first half performance against an unprecedented backdrop of global pandemic and recession Solid HY-20 performance Support of customers through the crisis reflected in higher customer satisfaction scores Manageable earnings Overall impact of USD 686m in HY-20 BOP; Es
Slide 4: COVID-19: We have earned the trust and confidence of customers and employees
KEY HIGHLIGHTS COVID-19: We have earned the trust and confidence of customers and employees through our actions with improved satisfaction levels SUPPORT FOR CUSTOMERS STRENGTHENED CUSTOMER FOCUS INCREASED EMPLOYEE SATISFACTION Retail NPS NPS place to work move3 1 +22 >USD 100m 1 ~USD 300m2 Oct-19 J
Slide 5: Well positioned for future success
KEY HIGHLIGHTS Well positioned for future success Resilient Strategy A balanced Industry Stable, Focus on customers and diverse leading capital consistent and and underwriting global business levels with conservatively discipline strong liquidity managed balance sheet Focus on the customer + Simplif
Slide 6: A leading global commercial insurer with strong growth and improved pricing
KEY HIGHLIGHTS A leading global commercial insurer with strong growth and improved pricing RANKING (FY-19 NEP, USDbn)1 HY-20 P&C COMMERCIAL GROWTH (%) P&C COMMERCIAL RATE CHANGE (%) 18% North America 12% 10% 7% 8% 4% 67% 8% Commercial share HY-20 GWP growth Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 of HY-
Slide 7: Retail business has been resilient with digital businesses growing
KEY HIGHLIGHTS Retail business has been resilient with digital businesses growing but travel business faces a slow recovery HY-20 P&C RETAIL GROWTH (%) HY-20 P&C RETAIL GROWTH (%) COVER-MORE Agency example: P&C Switzerland (Monthly GWP vs 2019, %) Monthly sales vs 2019 (%) 113% 105% 109% 113% 103% 1
Slide 8: Life business well positioned with limited exposure to traditional savings
KEY HIGHLIGHTS Life business well positioned with limited exposure to traditional savings; Sales trends improving particularly in the bank channel TRADITIONAL SAVINGS UNDER PRESSURE HY-20 NEW BUSINESS APE MIX (%) HY-20 LIFE GROWTH (%) Example: Life Switzerland retail (Monthly APE vs 2019, %) By line
Slide 9: Accelerating execution of customer focused strategy and digitalization
KEY HIGHLIGHTS We are accelerating the execution of our customer focused strategy and the digitalization of our business HY-20 KEY ACHIEVEMENTS GLOBAL WELLCARE BUSINESS ESTABLISHED Global approach, flexible and modular offering Strengthened position in accident & health with the acquisition of the S
Slide 10: Resilient balance sheet and conservative investments
KEY HIGHLIGHTS Resilient balance sheet and conservative investments GROUP SOLVENCY (%) MOODY’S LEVERAGE (%) & COVERAGE (x) HY-20 GROUP INVESTMENTS (%) 222% 25.8% 24.9% 6% 186% 185%1 22.6% 5% 2% 7% 34% 129% 2% 101% 102%2 13.2x USD 207bn 10.1x 9.4x 44% Z-ECM SST3 FY-18 FY-19 HY-20e Government and Real
Slide 11: Simple execution, higher ambition
KEY HIGHLIGHTS Simple execution, higher ambition 2016 – 2019 ACHIEVEMENTS 2020 – 2022 AMBITION SIMPLIFIED AND FLEXIBLE ORGANIZATION Delayered structure Simplified IT landscape BOPAT ROE1 >14% Simplified products and services Cumulative cash IMPROVED EFFICIENCY remittances USD >11.5bn Over-delivered
Slide 12: CFO update
CFO update © Zurich
Slide 13: COVID-19 remains an earnings event; P&C claims estimated USD 750m
GROUP – COVID-19 IMPACT COVID-19 remains an earnings event; P&C claims estimated to be USD 750m1 for FY-20 HY-20 COVID-19 GROUP BOP IMPACT (USDm)2 HY-20 PROPERTY & CASUALTY CLAIMS 3% P&C claims 750 8% P&C frequency benefits, 8% Property premium refunds 303 Liability USD and voluntary actions Special
Slide 14: Group BOP development driven by COVID-19, higher catastrophe losses
GROUP – BUSINESS OPERATING PROFIT Group BOP development driven by COVID-19, higher catastrophe losses and other macro economic developments BOP BY REGION (USDm) BOP BY BUSINESS (USDm) HY-20 BOP IMPACTS TO BE CONSIDERED -40% -40% 2,815 185 243 2,815 • COVID-19 impact 866 866 1,702 266 1,702 • Catastr
Slide 15: Limited items outside of BOP; Higher tax rate due to profit mix
GROUP – NET INCOME ATTRIBUTABLE TO SHAREHOLDERS Limited items outside of BOP; Higher tax rate due to profit mix BOP TO NIAS WALK (USDm) 27.5% Tax rate -11 -50 180 -18 -496 124 1,702 1,181 HY-20 BOP Realized capital gains/losses Restructuring costs and other1 Loss on disposal Income taxes attributabl
Slide 16: 2020 updated outlook
GROUP – OUTLOOK 2020 updated outlook • Pricing expected to harden further over 2020 and to remain in excess of loss cost inflation • Full year net earned premium expected to be around the same level as 2019 Property & Casualty • Second half investment income expected to decline at a slightly higher
Slide 17: P&C topline: good GWP growth and acceleration of commercial rate increases
P&C – TOPLINE Good GWP growth and acceleration of commercial rate increases; APAC and LatAm reductions driven by travel and extended warranty HY-20 TOPLINE DEVELOPMENT TOTAL RATE CHANGE (%)2 GWP like-for-like Rate change GWP (USDm) Rate change (%)2 growth (%)1 outlook 12% EMEA 8,780 7% 4% Accelerati
Slide 18: P&C BOP components
P&C – BOP COMPONENTS COVID-19, higher catastrophes and lower investment result explain HY-20 development BOP (USDm) BREAK DOWN BY COMPONENT (USDm) -55% 1,656 114 113 1,375 140 42 484 751 963 39 121 751 46 901 42 444 706 901 664 606 294 22 -198 -213 -174 -416 HY-19 HY-20 HY-20 COVID-19 impact1 Normal
Slide 19: P&C combined ratio details
P&C – COMBINED RATIO DETAILS 0.7ppt improvement in accident year combined ratio excluding catastrophes and COVID-19 COMBINED RATIO (%) LOSS RATIO (%) EXPENSE RATIO (%) 99.8% 67.1% 32.6% 32.8% 32.4% 95.1% 96.3% 62.5% 63.9% 2.3% 10.1% 4.1% 32.8% 32.6% 32.4% 17.2% 17.2% 17.3% 61.8% 58.5% 61.3% 1.7% 1.7
Slide 20: Strong improvement in underlying combined ratio in North America and Commercial
P&C – COMBINED RATIO BY SEGMENT AND CUSTOMER UNIT Strong improvement in underlying combined ratio in North America and in Commercial Insurance AY COMBINED RATIO (CR) EXCLUDING CATASTROPHES BY SEGMENT (%)1 AY CR EXCL. CATASTROPHES BY CUSTOMER UNIT (%)1 +1.5ppts -0.1ppts +0.1ppts -2.7ppts +0.2ppts -4.
Slide 21: P&C investment result driven by lower yields
P&C – INVESTMENT RESULT Investment result driven by lower yields and reduced hedge fund gains INVESTMENT RESULT IN BOP (USDm) INVESTMENT INCOME YIELD OF GROUP INVESTMENTS (%)1 2.9% 2.8% 1,129 162 943 42 HY-19 HY-20 967 901 BOOK & REINVESTMENT YIELD OF DEBT SECURITIES (%)2 2.8% 2.6% 2.7% 1.9% HY-19 H
Slide 22: Life business operating profit broadly stable
LIFE – BUSINESS OPERATING PROFIT Underlying Life BOP broadly stable, with second half BOP expected to be ahead of the underlying run-rate BOP (USDm) BOP EXCLUDING COVID-19 IMPACT (USDm) -20% 701 71 682 0 52 3 130 559 559 129 71 3 3 36 11 145 145 35 35 11 11 507 502 365 365 -6 HY-20 Claims and DAC an
Slide 23: Life BOP by source of earnings
LIFE – BUSINESS OPERATING PROFIT BY SOURCE OF EARNINGS Underlying Life BOP broadly stable, with higher loadings & fees and investment margin BUSINESS OPERATING PROFIT BY SOURCE OF EARNINGS (USDm) KEY DRIVERS HY-20 vs. HY-19 (%)1 Income from loadings & Actual Excl. COVID-19 87% fees and technical mar
Slide 24: Life premiums, net inflows and assets under management
LIFE – PREMIUMS, NET INFLOWS AND ASSETS UNDER MANAGEMENT Gross written premium and deposits impacted by reductions in EMEA GWP AND DEPOSITS (USDm) NET INFLOWS BY SEGMENT (USDbn) ASSETS UNDER MANAGEMENT (USDbn) -3% -37% -28% like-for-like1 -54% like-for-like1 -3% 18,101 4.5 275 268 2 -2 -7 3,276 38 3
Slide 25: Life new business and new business mix
LIFE – NEW BUSINESS AND NEW BUSINESS MIX Protection and capital efficient savings products account for ~89% of APE and ~100% of NBV APE (USDm)1 NBV (USDm)1 NBM (%)1 NEW BUSINESS MIX (%) -15% -25% HY-20 APE1 like-for-like2 like-for-like2 11% -25% -31% 20% 41% 2,229 505 25.9% 23.9% 67 589 28% 1,673 99
Slide 26: Life investment result
LIFE – INVESTMENT RESULT Investment result driven by lower realized capital gains; ongoing pressure on portfolio yield INVESTMENT RESULT IN BOP, GROSS OF PH (USDm)1 INVESTMENT INCOME YIELD OF GROUP INVESTMENTS (%)2 2.8% 2.5% 1,860 376 1,354 HY-19 HY-20 1,484 1,360 BOOK & REINVESTMENT YIELD OF DEBT S
Slide 27: Farmers Exchanges overview
FARMERS EXCHANGES1 – OVERVIEW Stable top line at Farmers Exchanges1 before customer premium credits with further improvement in net promoter score GWP (USDm) NPS AND RETENTION (%) COMBINED RATIO (%)2 SURPLUS 0% Excl. COVID- 19 impact 50.0 100.0% 101.6% 41.5% 41.1% 47.6 7.6% 9.4% -3% 10,458 10,103 6.
Slide 28: Farmers Management Services overview
FARMERS MANAGEMENT SERVICES – OVERVIEW Customer premium credits at Farmers Exchanges1 drive reduction in fees with no offset to costs at Farmers Management Services BUSINESS OPERATING PROFIT (USDm) MGEP MARGIN (%)1 737 7.0% 702 6.8% 28 662 6.6% 12 12 709 691 651 HY-19 HY-20 HY-20 excl. HY-19 HY-20 H
Slide 29: Farmers Life and Farmers Re overview
FARMERS LIFE AND FARMERS RE – OVERVIEW Farmers Life with strong growth in new business value BOP (USDm) FARMERS LIFE NEW BUSINESS APE (USDm)1 NBV (USDm)1 NBM (%)1 129 9 117 120 10 147% 10 115% 120 52 106 109 45 39 35 HY-19 HY-20 HY-20 excl. HY-19 HY-20 HY-19 HY-20 HY-19 HY-20 COVID-19 impact Farmers
Slide 30: Group Functions and Operations & Non-Core Businesses BOP
GROUP FUNCTIONS AND OPERATIONS & NON-CORE BUSINESSES – BOP Further reduction in overall cost of Group functions and operations; Non-Core Business impacted by financial market volatility GROUP FUNCTIONS AND OPERATIONS BOP (USDm) NON-CORE BUSINESSES BOP (USDm) -3 -139 -181 -232 -167 -348 -37 -371 -39
Slide 31: Strong capital position
GROUP – SOLVENCY RATIOS Strong capital position GROUP SOLVENCY (%) Z-ECM RATIO DEVELOPMENT (%) 240% 129% 0% 222% 3% 217% 221% 216% 204% 196% 198% 200% 189% 185% 185%1 -33% 160% 102%2 132% 129% 127% 125% 124% 8% 122% 121% -4% 120% 114% 102%2 80% FY-12 FY-13 FY-14 FY-15 FY-16 FY-17 FY-18 FY-19 HY-20e
Slide 32: Balance sheet and capital structure
GROUP – BALANCE SHEET AND CAPITAL STRUCTURE Payment of dividend and FX movements drive reduction in shareholders’ equity SHAREHOLDERS’ EQUITY (USDm) CAPITAL STRUCTURE (%)1 -5% 35,004 1,181 11% 13% -3,080 33,194 15% 16% -851 274 666 74% 70% FY-19 NIAS Dividend Currency Net Pension HY-20 FY-19 HY-202
Slide 33: 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). Fo
Slide 34: Appendix
Appendix © Zurich
Slide 35: We are focused on continuing to reward our shareholders
GROUP – DIVIDEND POLICY We are focused on continuing to reward our shareholders 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 FY-08 FY-09 FY-10 FY-11 FY-12 FY-13 FY-14 FY-15 FY-16 F
Slide 36: Farmers Exchanges GWP, PIF/VIF and combined ratio by line
FARMERS EXCHANGES1 – GWP, PIF/VIF AND COMBINED RATIO BY LINE Top-line impacted by auto and SME premium credits GROSS WRITTEN PREMIUM (USDm) POLICIES-IN-FORCE (000’s) COMBINED RATIO (%) 10,458 13,665 13,567 10,103 152 545 557 148 398 394 101.0% 1,149 1,075 Auto 101.4% 1,383 3,279 3,340 1,459 102.0% H
Slide 37: P&C reinsurance program
P&C – REINSURANCE PROGRAM Balance sheet and large loss volatility well managed through reinsurance GROUP CATASTROPHE REINSURANCE PROTECTION (USDm) GLOBAL SURETY EXCESS OF LOSS • Designed to manage earnings volatility 200 • North America: USD 350m coverage per customer in excess of 115 USD 50m retent
Slide 38: Group Z-ECM components
GROUP – Z-ECM COMPONENTS Well diversified capital base by risk type AVAILABLE FINANCIAL RESOURCES (USDbn)1 RISK-BASED CAPITAL SPLIT (%)1 Market risk Shareholders equity 33.2 12% 3% Reinsurance credit risk 7% Premium and reserving risk 6% 52% Natural catastrophe risk Dividend accrual -1.6 Life insura
Slide 39: Solvency ratio sensitivities
GROUP – SOLVENCY RATIO SENSITIVITIES1 Solvency ratios resilient to market movements FY-19 Z-ECM SENSITIVITY IMPACT (ppts)1 FY-19 SST SENSITIVITY IMPACT (ppts)1 Actual value Actual value Interest rate +50bps +5ppts Interest rate +50bps +5ppts Interest rate -50bps -14ppts Interest rate -50bps -10ppts
Slide 40: Group debt
GROUP – DEBT Low average debt cost and balanced maturity profile DEBT (USDbn) AND AVERAGE DEBT COST (%) BALANCED REFINANCING NEEDS (USDbn)2 14.0 2.1 2.0 12.0 1.8 1.6 Average debt cost (%) FY-19 FY-20e 7.7 6.9 1.6 1.2 Subordinated 4.6% 4.3% 1.0 1.1 1.1 1.9 Senior 1.4% 1.5% 0.8 0.7 0.6 0.6 6.3 Total 3
Slide 41: Group investment portfolio
GROUP – INVESTMENT PORTFOLIO Conservative investment portfolio with low exposure to industries most stressed by the crisis HY-20 GROUP INVESTMENTS (%)1 HY-20 ASSET QUALITY (%) HY-20 NON-FINANCIAL CREDIT BY SECTOR (%) USD 70bn USD 92bn Technology 3% 0% 1% Transportation Other 6% 5% 5% 5% 2% Capital g
Slide 42: Highly diversified credit and private debt portfolio
GROUP – INVESTMENT PORTFOLIO Highly diversified credit and private debt portfolio HY-20 RATING OF CREDIT, PRIVATE DEBT SECURITIES (%) USD 28.3bn USD 20.5bn USD 16.8bn USD 8.7bn USD 6.7bn USD 11.0bn 2% 2% 1% 1% 1% 3% 6% 3% 1% 13% 4% 19% 13% 29% 45% 52% 36% 49% 90% 68% 21% 44% 33% 2% 24% 21% 6% 6% 1%
Slide 43: Alternative markets in North America reported under Commercial Insurance
RESTATEMENTS Alternative markets in North America reported under Commercial Insurance going forward OLD DISCLOSURE NEW DISCLOSURE FY-19 P&C overview by Retail and Other FY-19 P&C overview by Retail and SME Commercial Insurance Commercial Insurance customer unit (USDm)1 Insurance customer unit (USDm)
Slide 44: Definition of adjusted P&C combined ratio and like-for-like growth
ALTERNATIVE PERFORMANCE MEASURES Definition of adjusted P&C combined ratio and like-for-like growth P&C COMBINED RATIO (%) LIKE-FOR-LIKE GROWTH Combined ratio HY-19 (USDm) HY-20 (USDm) Like- HY-20 combined KPI COVID-19 impact (excl. COVID-19 KPI for-like ratio (reported) Rep M&A Adj Rep FX M&A1 Adj1
Slide 45: Commentary
Commentary © Zurich
Slide 46: Page 3: Key messages
COMMENTARY Page 3: Key messages The Group’s half year 2020 results show a solid performance in a challenging period in which the Group faced the unprecedented impact of the COVID-19 pandemic, a global recession and elevated levels of catastrophe losses. Throughout this period, the Group has ensured
Slide 47: Page 4: Key highlights
COMMENTARY Page 4: Key highlights Post the outbreak of COVID-19 around the world the group’s priorities have been to protect employees while supporting customers and the communities in which it operates. During the first half of the year the group contributed in excess of USD 100m to support of cust
Slide 48: Page 5: Key highlights
COMMENTARY Page 5: Key highlights The Group’s balanced, and diverse global business coupled with its strong, conservatively managed balance sheet and high levels of liquidity provide a strong platform from which to drive growth through the Group’s customer focused strategy. © Zurich August 13, 2020
Slide 49: Page 6: Key highlights
COMMENTARY Page 6: Key highlights Zurich ranks among the leading global commercial P&C insurers. The reshaping and improvement in profitability of the Group’s commercial insurance portfolio over 2016-19, positioned the Group well to take advantage of the current significant improvement in global com
Slide 50: Page 7: Key highlights
COMMENTARY Page 7: Key highlights The Group’s retail P&C business remained resilient over the first half of the year with gross written premiums declining 3% on a like-for-like basis adjusted for currency and acquisitions and disposals, however, the group observed significant differences between ind
Slide 51: Page 8: Key highlights
COMMENTARY Page 8: Key highlights The Group’s long-term strategy of focusing on protection and capital light savings business, continues to position the Group’s life business well for the prevailing low yield environment. In the first half of 2020, 89% of new business production came from protection
Slide 52: Page 9: Key highlights
COMMENTARY Page 9: Key highlights In support of the customer focused strategy, the Group continued to enhance its digital capabilities, expand customer access and strengthen market positions in areas of focus. Investments made in 2019 and 2020 to fully digitize the end-to-end day of the Group’s agen
Slide 53: Page 10: Key highlights
COMMENTARY Page 10: Key highlights The Group’s balance sheet remains strong, with modest levels of financial leverage, a strong liquidity position and a conservative investment portfolio. Group solvency improved over the second quarter of the year as a result of improved financial markets, with the
Slide 54: Page 11: Key highlights
COMMENTARY Page 11: Key highlights The Group delivered fully on the targets for the 2017-2019 period while making a more efficient, simpler and more agile organization. In November 2019, the Group announced the following financial targets which it remains focused on achieving; • A BOPAT ROE in exces
Slide 55: Page 13: Group – COVID-19 impact
COMMENTARY Page 13: Group – COVID-19 impact As announced with the first quarter results in May, the Group expects the overall impact of the COVID-19 outbreak to remain an earnings event. The continuing nature of the event still entails some degree of uncertainty. The overall level of P&C claims rela
Slide 56: Page 14: Group – Business operating profit
COMMENTARY Page 14: Group – Business operating profit Overall Group business operating profit declined 40% on a reported basis due to the impact of COVID-19 and associated financial market impacts as well as higher levels of other catastrophe events. EMEA which saw the greatest net impact from COVID
Slide 57: Page 15: Group – NIAS
COMMENTARY Page 15: Group – NIAS Net income attributable to shareholders (NIAS) fell 42% in the year, driven by the decline in BOP and the recognition of net realized capital losses on investments instead of net realized gains in the prior year as well as a higher effective tax rate. The effective t
Slide 58: Page 16: Group – Outlook
COMMENTARY Page 16: Group – Outlook P&C: The Group expects further hardening of pricing over 2020 with price increases expected to remain ahead of loss cost inflation. The benefit of increased price levels is expected to be largely offset by a range of factors including lower demand as a result of d
Slide 59: Page 17: P&C – Top line
COMMENTARY Page 17: P&C – Top line Gross written premiums in Property & Casualty (P&C) for the first half of 2020 increased 4% on a like-for-like basis, after adjusting for currency movements and closed acquisitions and disposals. Growth was driven by Europe, Middle East and Africa (EMEA) and North
Slide 60: Page 18: P&C – BOP components
COMMENTARY Page 18: P&C – BOP components HY-20 P&C BOP was USD 751m, 55% lower than in the previous year. The decline was driven primarily by the impact of the COVID-19 outbreak and associated financial market developments, as well as higher catastrophe losses than in the previous year. The overall
Slide 61: Page 19: P&C – Combined ratio details
COMMENTARY Page 19: P&C – Combined ratio details The combined ratio of 99.8% in the first half was 4.8 percentage points higher than in the prior year period. The deterioration was entirely driven by COVID-19 claims and higher catastrophes, while underlying performance improved by 0.7 percentage poi
Slide 62: Page 20: P&C – Combined ratio by segment and customer unit
COMMENTARY Page 20: P&C – Combined ratio by segment and customer unit In EMEA, the accident year combined ratio ex-catastrophes remained in line with the previous year after removing the impact of COVID-19 related frequency benefits and voluntary actions to support customers during the outbreak. In
Slide 63: Page 21: P&C – Investment result
COMMENTARY Page 21: P&C – Investment result Investment income was USD 66 million below 2019, with reductions primarily in EMEA and North America, due to lower investment yields. Realized capital gains of USD 42 million were USD 120 million below the very strong result of the first six months of 2019
Slide 64: Page 22: Life – Business operating profit
COMMENTARY Page 22: Life – Business operating profit Life BOP for HY-20 was USD 559m, 20% below the prior year on a reported basis and 3% below excluding the COVID-19 impact for Life of USD 123m. On an underlying basis Life performance has been stable, also considering movements in exchange rates an
Slide 65: Page 23: Life – BOP by source of earnings
COMMENTARY Page 23: Life – Business operating profit by source of earnings The Group’s life business continued to be driven by stable income streams on a sources of earnings view, with 87% of income coming from loadings and fees together with technical margins. Viewed by margin and excluding the imp
Slide 66: Page 24: Life – Premiums, net inflows and AuM
COMMENTARY Page 24: Life – Premiums, net inflows and assets under management In the Group’s Life business, gross written premiums and deposits were down 28% in HY-20 compared to HY-19 on a reported basis, and down 3% on a like- for-like basis, adjusting for currency movements, acquisitions and dispo
Slide 67: Page 25: Life – New business and new business mix
COMMENTARY Page 25: Life – New business and new business mix In the first six months, Life new business annual premium equivalent (APE) sales decreased 15% on a like-for-like basis, adjusting for currency movements, acquisitions and disposals. The decline reflects the COVID-19 related impact of gove
Slide 68: Page 26: Life – Investment result
COMMENTARY Page 26: Life – Investment result Life investment result, which is gross of policyholder sharing, decreased by 27% to USD 1.4bn in U.S. dollars, driven mainly by lower realized capital gains compared to prior year. © Zurich August 13, 2020 Half year results 2020 68
Slide 69: Page 27: Farmers Exchanges – Key metrics
COMMENTARY Page 27: Farmers Exchanges – Key metrics Gross written premiums of the Farmers Exchanges decreased 3%. Underlying growth of 0.2% was offset by approximately USD 300m in COVID-19 premium credits as well as an adjustment to previously booked gross premiums relating to lower expected volumes
Slide 70: Page 28: FMS – Overview
COMMENTARY Page 28: FMS – Overview Farmers Management Services (FMS) BOP decreased 10% compared to the prior year. This was mainly driven by reduced fee revenues as a result of the premium credits to customers at the Farmers Exchanges, higher operating expenses mainly due to timing differences and a
Slide 71: Page 29: Farmers Life and Farmers Re – Overview
COMMENTARY Page 29: Farmers Life and Farmers Re – Overview Farmers Life BOP of USD 106m was USD 14m lower than in the prior year. The result was mainly driven by lower claims in the prior year. Farmers Life new business APE was 8% lower than in the prior-year period, while new business value increas
Slide 72: 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 22m to USD 348m. This was driven by a USD 64m reduction in Holding and Financing costs due to lower interest expenses, partially of
Slide 73: Page 31: Group – Solvency ratios
COMMENTARY Page 31: Group – Solvency ratios The Group’s balance sheet remains very strong, with Zurich’s economic capital model (Z-ECM) ratio estimated to be 102% as of June 30, within the Group’s target range. The Group’s Swiss Solvency Test (SST) ratio based on standard yield curves allowed by the
Slide 74: Page 32: Group – Balance sheet and capital structure
COMMENTARY Page 32: Group – Balance sheet and capital structure Shareholders’ equity decreased by USD 1.8bn mainly driven by the payment of the Group dividend in the second quarter partly offset by the net income of USD 1.2bn. Over the first half of the year the Group issued around USD 800m of comme
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: • November 12, Update for the nine months ended September 30, 2020 • February 11, 2021, Annual Results 2020 © Zurich Insurance Company Ltd
Zurich Insurance Group — H1 2020 Earnings Presentation on 6ix