Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — FY2017 Earnings Presentation
77 slides from Zurich Insurance's earnings presentation, Feb 8, 2018
Slide 1: Annual results 2017 – Building Momentum
Annual results 2017 – Building Momentum Investor presentation February 8, 2018 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 Group BOP and NIAS P&C catastrophe reinsurance program Property & Casualty (P&C) Farmers Exchanges Life Group solvency Farmers Group debt Group Functions a
Slide 3: Strong progress underpins dividend increase
KEY HIGHLIGHTS Strong progress underpins dividend increase Group Strong performance with underlying BOP1 up 6% and BOPAT ROE1 of 12.1% Dividend & Return to dividend growth, with proposed dividend increase of 6% to CHF 18; capital estimated Z-ECM at 132%; intention to repurchase ~USD 1bn of shares P&
Slide 4: On track to deliver our 2017-2019 targets
KEY HIGHLIGHTS On track to deliver our 2017-2019 targets BOPAT ROE (%)1 Z-ECM RATIO (%) CUMULATIVE CASH REMITTANCES (USDbn) 12.1% >12.0% 132% >9.5 120% 100% 3.7 FY-17 Target2 FY-17e3 Target range FY-17 2017 - 2019 Target2 CUMULATIVE NET EXPENSE SAVINGS (USDm) USD 700m as of FY-17 2015 2016 2017 2018
Slide 5: USD 700m of expense savings delivered to date
KEY HIGHLIGHTS USD 700m of expense savings delivered to date IFRS EXPENSE SAVINGS (USDbn) BREAKDOWN OF EXPENSE SAVINGS (%) 9.7 0.0 9.0 USD 700m -0.7 0.0 11% 32% 59% 31% 38% 31% 2015 @2017 FX M&A Savings One-offs 2017 FY-15 FY-17 Cost base Cumulative net expense savings Group Business Units Operation
Slide 6: Continued delivery across all businesses
KEY HIGHLIGHTS Continued delivery across all businesses P&C LIFE FARMERS EXCHANGES2 100.9% reported COMBINED RATIO (%)1 BOP GROWTH (%)1 COMBINED RATIO (CR) (%) 103.9% 101.6% 98.1% 98.2% 7.1% +22% 7.3% 2.6% 3.1% 31.7% 31.8% 96.8% 94.3% 65.7% 64.8% -1.8% -1.4% FY-16 FY-17 FY-16 FY-17 FY-16 FY-17 Cat E
Slide 7: Good underlying progress with Group BOP up 6% excluding exceptional items
KEY HIGHLIGHTS Good underlying progress with Group BOP up 6% excluding exceptional items FY-17 BOP ADJUSTMENTS (USDm) BOP BY BUSINESS (USDm) +6% 4,762 4,495 4,762 143 115 3,803 700 2,344 2,437 2,344 1,546 1,258 1,380 1,130 1,380 1,691 1,691 1,722 1,691 39 39 39 -731 -693 -779 -693 -15 FY-17 Hurrican
Slide 8: 2018 Outlook
KEY HIGHLIGHTS 2018 Outlook NEP expected to be broadly stable P&C Combined ratio to move towards the indicated 95-96% range by 2019 Decline in investment income to continue to moderate Life Growth expected to be in mid-single digit range from reported level Steady growth expected in Farmer
Slide 9: Expected ROE development enhanced by OnePath life acquisition, US tax reform and capital return
KEY HIGHLIGHTS Expected ROE development enhanced by OnePath life acquisition, US tax reform and capital return ILLUSTRATIVE BOPAT ROE DEVELOPMENT 0-1% ~14% ~0.5% ~0.5% 12.1% ~1.75% 12%1 1.5-2% ~0.5% 0.5-1% FY-172 Growth in Life & Farmers Loss ratio Expense savings US tax Capital 2019 Non-operating N
Slide 10: Attractive dividend proposal, with ~6% growth
KEY HIGHLIGHTS Attractive dividend proposal, with ~6% growth DIVIDEND PROPOSAL NEW ANTI DILUTION MEASURES AND CAPITAL MANAGEMENT Dividend growth resumed with proposal of CHF In line with the Group’s policy on anti dilution, the 18 per share dividend1 Group plans to repurchase shares up to the amou
Slide 11: FY-17 CFO update
@ ZURICH FY-17 CFO update
Slide 12: Net income benefits from positive gains realization
GROUP – BOP AND NIAS Net income benefits from positive gains realization BOP TO NIAS WALK (USDm) Tax rate 33.2% -355 -107 1,201 -700 -143 411 -1,645 -115 305 4,762 3,803 3,004 FY-17 BOP Hurricanes Charges related UK indexation FY-17 BOP RCG1 Restructuring Other Income taxes FY-17 NIAS adjusted Harve
Slide 13: Positive outcome expected from US tax reform
GROUP – US TAX REFORM Positive outcome expected from US tax reform 3Y AVERAGE GROUP BOP SPLIT (%) 20% 2017 one-time release of net deferred tax liabilities of USD 289m 42% Estimated ~3-4 percentage point reduction in effective tax rate Group capital position under Z-ECM unchanged Cash remitt
Slide 14: Positive rates and improving topline
P&C – TOPLINE Positive rates and improving topline FY-17 TOPLINE DEVELOPMENT RATE CHANGE (%)1 NORTH AMERICA RATE CHANGE (%)1 GWP Like-for-like FY-17 Change vs. FY-16 (USDm) GWP growth (%) 1.6% EMEA 14,075 -2% 2% Stable North 1.0% 15,137 0% 1% Stable 0.9% America 0.6% APAC 2,405 9% 2% Increasing 0.2%
Slide 15: Positive investment result offset by lower FX gains, with improved underlying underwriting result
P&C – BOP COMPONENTS Positive investment result offset by lower FX gains, with improved underlying underwriting result BOP BREAK DOWN (USDm)1 KEY DRIVERS (USDm)1 USD 1,546m USD 1,546m reported reported 2,437 2,344 2,437 2,344 -115 -19 69 485 469 -477 449 1,958 2,038 -6 -162 FY-16 EMEA North APAC Lat
Slide 16: Continuous improvement in accident year loss ratio ex-cat
P&C – COMBINED RATIO DETAILS Continuous improvement in accident year loss ratio ex-cat COMBINED RATIO (%)1 AY LOSS RATIO EXCLUDING CATASTROPHES (%)4 100.9% reported 103.6% 68.2% 98.1% 98.2% -0.9ppts 65.7% 31.7% 31.7% 31.8% 64.8%1 71.8% 66.4% 66.4% FY-15 FY-16 FY-17 Catastrophes3 3.5% 2.6% 5.8% FY-15
Slide 17: Lower absolute expenses drive reduction in OUE ratio
P&C – EXPENSE RATIO DETAILS Lower absolute expenses drive reduction in OUE ratio Change in business mix leads to increase in commission ratio OTHER UNDERWRITING EXPENSE (OUE) RATIO (%)1 COMMISSION RATIO (%)1 +1.2ppts -1.2ppts 16.1% 15.9% 15.4% 14.7% 14.2% 14.0% FY-15 FY-16 FY-17 FY-15 FY-16 FY-17 ©
Slide 18: Underlying improvements in most regions and across retail business
P&C – COMBINED RATIO BY SEGMENT AND CUSTOMER UNIT Underlying improvements in most regions and across retail business AY COMBINED RATIO (CR) EXCLUDING CATASTROPHES BY SEGMENT (%)1 AY CR EXCL. CATASTROPHES BY CUSTOMER UNIT (%)1 102.1% 99.1% 101.0% 96.0% 97.0% 96.6% 96.5% 97.9% 98.4% 94.1% 94.8% 92.9%
Slide 19: Gap to new money yields narrowing
P&C – INVESTMENT RESULT Gap to new money yields narrowing INVESTMENT RESULT IN BOP (USDm) INVESTMENT INCOME YIELD INVESTMENT INCOME YIELD OF GROUP INVESTMENTS (%)1 2,038 1,958 2.7% 2.7% 67 191 FY-16 FY-17 1,891 1,847 INVESTMENT INCOME & REINVESTMENT YIELD OF DEBT SECURITIES (%)2 2.7% 2.7% 2.4% 2.0%
Slide 20: Higher loadings and fees support 22% growth in underlying BOP
LIFE – BOP BY SEGMENT AND SOURCE Higher loadings and fees support 22% growth in underlying BOP1 BOP BY SEGMENT (USDm)1 BOP BY SOURCE OF EARNINGS (USDm)1 D FY-16 +22% Reported LC Loadings & fees 2,708 775 3,484 1,380 6% 6% 47 1 1 1,130 56 Inv. margin 642 0 83 296 18% 16% 63 249 132 Technical margin 9
Slide 21: Focus on improving business mix contributes to new business value growth of 28%
LIFE – NEW BUSINESS Focus on improving business mix contributes to new business value growth of 28% APE (USDm)1 NBM & NBV1 +3% like- for-like2 23.3% 19.4% +4% NBM (%) 4,868 4,686 1,117 1,231 +29% like- 195 155 224 for-like2 62 NBV (USDm) +28% 999 782 164 3,238 3,333 126 165 88 66 25 541 605 FY-16 FY
Slide 22: Improved business mix and new business value growth through bank distribution, agents and brokers
LIFE – PRODUCT AND DISTRIBUTION MIX Improved business mix and new business value growth through bank distribution, agents and brokers PRODUCT MIX (USDm)1 DISTRIBUTION MIX (USDm)1 APE 4,868 APE 4,868 4,686 4,686 11% 18% 26% 38% 40% 22% 25% 29% 25% 28% 89% 35% 35% 37% 31% FY-16 FY-17 FY-16 FY-17 NBV 9
Slide 23: AUM growth of 8% driven by positive net flows and markets
LIFE – NET INFLOWS AND ASSETS UNDER MANAGEMENT AUM growth of 8% driven by positive net flows and markets with reduced volumes of low margin savings business in EMEA NET INFLOWS BY SEGMENT (USDbn) AUM DEVELOPMENT (USDbn) +8% 270 7.8 7.7 249 23 8 -9 44 36 2.5 2.4 0.3 0.1 111 99 1.9 5.2 3.4 114 116 -0.
Slide 24: Growth in asset base offset by lower yields, gap to new money yields narrowing
LIFE – INVESTMENT RESULT Growth in asset base offset by lower yields, gap to new money yields narrowing INVESTMENT RESULT IN BOP GROSS OF PH (USDm)1 INVESTMENT INCOME YIELD INVESTMENT INCOME YIELD OF GROUP INVESTMENTS (%)2 3,633 3,574 3.1% 2.9% 640 649 FY-16 FY-17 2,993 2,925 INVESTMENT INCOME / REI
Slide 25: Rate increases in auto continue to drive growth
FARMERS EXCHANGES1 – GROWTH Rate increases in auto continue to drive growth GWP GROWTH (%) GROWTH BY BUSINESS LINE (%) 3.8% 3.6% 4.8% Auto 7.0% 2.9% 1.0% Home 2.3% 4.7% 1.9% 10.9% Personal Umbrella 13.7% 1.5% 3.0% Specialty 2.5% 0.5% 0.3% Business Insurance 0.1% 0.6% 1.0% Q1-17 Q2-17 Q3-17 Q4-17 Tot
Slide 26: Strong combined ratio excl. catastrophes improvement driven by auto
FARMERS EXCHANGES1 – PROFITABILITY Strong combined ratio excl. catastrophes improvement driven by auto COMBINED RATIO (%)2 CR EXCL. CATASTROPHES BY SURPLUS3 QUARTER (%)2 Farmers Exchanges 103.9% 101.6% 7.1% 38.6% 7.3% 37.0% -2.3ppts 96.8% 94.3% 94.5% 5.5 5.5 FY-16 FY-17 Auto2 109.2% 2.1% 103.7% 2.0%
Slide 27: Improved trends in leading topline indicators
FARMERS EXCHANGES1 – GROWTH DRIVERS Improved trends in leading topline indicators NET PROMOTER SCORE2 AND RETENTION (%)3 NEW BUSINESS COUNT – YTD CHANGE (%)4 43.5 6.7% 43.3 43.2 43.3 5.5% 43.0 43.1 42.7 1.4% 82.6% 82.6% 82.6% 42.6 82.5% -2.3% 81.9% 81.6% 81.6% 81.7% -11.3% -13.7% -16.8% -19.3% Q1-16
Slide 28: Stable margin and BOP contribution from FMS
FARMERS MANAGEMENT SERVICES – OVERVIEW Stable margin and BOP contribution from FMS BOP (USDm) MGEP MARGIN (%)1 1,478 7.0% 7.0% 1,415 862 1,392 FY-16 FY-17 FY-16 FY-17 © Zurich 1 Margin on gross earned premiums of the Farmers Exchanges. Regarding Farmers Exchanges see footnote 2 on slide 3. 2 Refers
Slide 29: Improvement of Farmers Re combined ratio and Life profitability
FARMERS LIFE AND FARMERS RE – OVERVIEW Improvement of Farmers Re combined ratio and Life profitability BOP (USDm)1 FARMERS LIFE APE & NBV (USDm)1 FARMERS RE CR (%)1 APE 277 94 91 103.3% 100.1% 6.7% 244 6.2% 220 202 NBV 96.6% 93.9% 100 85 42 57 FY-16 FY-17 FY-16 FY-17 FY-16 FY-17 Farmers Life Farmers
Slide 30: Reduced financing costs benefit the result, reduced Group center expenses offset
GROUP FUNCTIONS AND OPERATIONS & NON-CORE BUSINESSES – BOP Reduced financing costs benefit the result, reduced Group center expenses are offset by lower recharges to business units GROUP FUNCTIONS AND OPERATIONS BOP (USDm) NON-CORE BUSINESSES BOP (USDm) -230 -281 39 -549 -450 -731 -779 -15 FY-16 FY-
Slide 31: Capital position remains strong and above target range
GROUP – SOLVENCY RATIOS Capital position remains strong and above target range Z-ECM AND SST RATIO (%)1 INDICATIVE Z-ECM RATIO DEVELOPMENT (%) 240% 227% 217% 220% 12% -12% 196% 200% 189% -1% 0% 185% -3% 132% 180% 11% 125% 160% 140% 132% 127% 125% 122% 121% 120% 114% 100% FY-12 FY-13 FY-14 FY-15 FY-1
Slide 32: Expected changes to SST will not affect our capital strength
GROUP – SWISS SOLVENCY TEST Expected changes to SST will not affect our capital strength; FY-16 SST ratio pro-forma is expected to remain above 200% SST IMAP1 UPDATE IMPACT ON GROUP SST RATIO The discussions with FINMA are close to be final Agreed changes are expected to have a pro-forma impact
Slide 33: Retained earnings and FX drive growth in shareholders’ equity
GROUP – BALANCE SHEET AND CAPITAL Retained earnings and FX drive growth in shareholders’ equity SHAREHOLDERS’ EQUITY (USDM) CAPITAL STRUCTURE (%)1 +8% 33,062 9% 7% 566 3,004 -2,639 260 17% 19% 1,211 30,660 73% 76% FY-16 NIAS Dividend Currency Net URG/L Pension FY-17 FY-16 FY-171 translation plans &
Slide 34: Strong cash remittances in 2017, dividend proposal of CHF 18
GROUP – CASH REMITTANCES AND DIVIDEND Strong cash remittances in 2017, dividend proposal of CHF 18 NET CASH REMITTANCES (USDbn) DIVIDEND PER SHARE (CHF) +6% 3.7 3.9 18 2.8 17 17 17 17 17 17 17 1.7 2.5 16 0.9 2.0 1.1 1.5 0.4 1.1 1.2 0.5 0.1 -0.6 -0.8 -0.9 11 -0.2 FY-15 FY-16 FY-17 FY-08 FY-09 FY-10 F
Slide 35: 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 36: Appendix
@ ZURICH Appendix
Slide 37: 2017-2019 Financial targets
GROUP – FINANCIAL TARGETS 2017-2019 Financial targets1 BOPAT ROE2 in excess of 12% and increasing, despite higher equity base USD 1.5bn in net savings by 2019 compared to the 2015 baseline Z-ECM target ratio of 100-120% Cash remittances in excess of USD 9.5bn over 2017-2019 period © Zurich 1 Target
Slide 38: 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) 200 105 200 200 750 750 200 750 200 350 750 250 468 250 250 300 7503 510 600 600 200 Europe US US Rest of World all perils Global aggregate cat treaty all perils1 all pe
Slide 39: Rate increases in auto drive growth
FARMERS EXCHANGES1 – GWP AND PIF/VIF Rate increases in auto drive growth DEVELOPMENT OF GWP (USDm) DEVELOPMENT OF PIF/VIF (000’s)2 +1.0% -4.1% 19,714 19,908 18,689 17,928 7,701 8,035 4.3% 7,846 7,464 -4.9% 949 1,062 11.8% 750 12.5% 596 591 711 844 -0.8% 646 -9.2% 5,248 5,302 4,835 1.0% 4,765 -1.4% 1
Slide 40: Strong improvement of auto combined ratio
FARMERS EXCHANGES1 – COMBINED RATIO Strong improvement of auto combined ratio COMBINED RATIO BY BUSINESS LINE (%)2 104.8% 101.4% Auto3 110.3% Auto3 110.0% Bristol West3 95.0% Bristol West3 91.1% 100.1% 95.7% 21st Century 104.8% 21st Century 108.7% CA/HI3 110.4% CA/HI3 118.6% Home 100.0% Home 91.9% 9
Slide 41: Well diversified capital base by risk type
GROUP – Z-ECM COMPONENTS Well diversified capital base by risk type FY-17 AFR COMPOSITION (USDbn)1 9M-17 RBC SPLIT (%)1,2 8% Market risk Shareholders equity 33 5% Re-ins credit risk 7% 2% P&R risk1 Dividend accrual incl. 4 52% Natural cat risk anti dilution measures 22% Life insurance risk Net intan
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-17 134% Actual value as of FY-16 227% Interest rate +100 bps 137% Interest rate +100 bps 233% Interest rate -100 bps 128% Interest rate -100 bps 207% USD appreciation +
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 11.2 2.2 10.8 2.1 0.6 0.2 4.2 3.8 Average debt 1.3 2016 2017 1.3 cost (%) 0.1 1.1 Senior 1.3 1.3 1.9 0.8 0.5 0.7 1.6 7.1 6.9 0.6 Subordinated 5.5 5.1 0.3 1.2 0.3 0.3 Tota
Slide 44: Commentary
@ ZURICH Commentary
Slide 45: Page 3: Key messages
COMMENTARY Page 3: Key messages 2017 showed a strong underlying performance, with BOP up 6% versus the prior year after adjusting for the impact of the hurricanes Harvey, Irma and Maria, the impact of charges related to the Group’s restructuring taken through business operating profits and the impac
Slide 46: Page 4: Key highlights – Status on financial targets
COMMENTARY Page 4: Key highlights – Status on financial targets The second half of 2017 continued to build on the positive first half of the year with the Group making good progress in terms of profitability across the businesses, and is on track to meet the financial targets set out in November 201
Slide 47: Page 5: Key highlights – Expense development
COMMENTARY Page 5: Key highlights – Expense development The FY-17 result includes expense savings of USD 700m. These savings exclude Farmers and take into account FX and the impact of acquisitions and disposals completed during 2016 and 2017, and come largely from P&C. This represents good progress
Slide 48: Page 6: Key highlights – Proof points by business
COMMENTARY Page 6: Key highlights – Proof points by business 2017 has seen the Group move steadily forward against the Group’s priorities, with the business showing a range of proof points against key management goals, including: Property & Casualty (P&C) gross written premiums were stable over the
Slide 49: Page 7: Key highlights – Underlying BOP
COMMENTARY Page 7: Key highlights – Underlying BOP During 2017 the Group’s operating results were distorted by a number of one off impacts, with the most notable being the high level of natural catastrophe events as well as the impact of the change to the UK capital gains tax indexation relief annou
Slide 50: Page 8: 2018 Outlook
COMMENTARY Page 8: 2018 Outlook The economic backdrop has continued to improve in most of the geographies the Group operates, with a combination of higher economic growth and more favorable yield levels. As a significant employer and tax payer in the United States, the Group also welcomes the US adm
Slide 51: Page 9: Group – BOPAT ROE walk
COMMENTARY Page 9: Group – BOPAT ROE walk When compared to the ROE walk presented at the time of the November 2016 Investor Day, the Group’s BOPAT ROE is expected to benefit positively from the combination of, a lower tax rate as a result of the US Tax Reforms, the capital return measures announced
Slide 52: Page 10: Dividend and capital management
COMMENTARY Page 10: Dividend and capital management The Board proposal to the AGM is to pay a dividend of CHF 18, representing a 6% increase from the 2016 level and the first year of dividend growth since 2010. As in the prior year and to ensure the tax efficiency of the payment for our shareholders
Slide 53: Page 12: Group – BOP to NIAS walk
COMMENTARY Page 12: Group – BOP to NIAS walk Below the operating line, realized capital gains of USD 1,201m were ahead of prior year levels and relate primarily to realization of gains on equities following strong equity market performance over the course of 2017. For the full year restructuring cos
Slide 54: Page 13: Impact of US tax reform
COMMENTARY Page 13: Impact of US tax reform The “US Tax cut and jobs act” (US reforms) has a number of measures that will impact the Group. The most important of which is the lowering of the US Corporate income tax rate to 21% from 35% previously together with the implementation to the “Base Erosion
Slide 55: Page 14: P&C – Top line
COMMENTARY Page 14: P&C – Top line Gross written premiums in Property & Casualty (P&C) for the full year of 2017 increased 1% in local currency after adjusting for acquisitions and disposals and was flat on a headline basis. Growth improved steadily over the year with the second half year showing a
Slide 56: Page 15: P&C – BOP Components
COMMENTARY Page 15: P&C – BOP Components P&C BOP for FY-17 was USD 2,344m after adjusting for the impact of the hurricanes Harvey, Irma and Maria and charges related to the Group’s restructuring recognized within BOP, and is 4% lower than in the previous year. The underwriting result adjusted for th
Slide 57: Page 16: P&C – Combined ratio details
COMMENTARY Page 16: P&C – Combined ratio details The P&C combined ratio for FY-17 is at 98.2%, when normalized for losses related to hurricanes Harvey, Irma and Maria. The accident year loss ratio excluding catastrophes and the other underwriting expense ratio both improved by roughly 1ppt compared
Slide 58: Page 17: P&C – Expense ratio details
COMMENTARY Page 17: P&C – Expense ratio details The other underwriting expense ratio for FY-17 was 1.2ppts better than in FY-16. Absolute expenses continued to reduce throughout the year, with the majority of the 2017 net expense savings of circa USD 0.4bn for the Group recognized within P&C, mainly
Slide 59: Page 18: P&C – Combined ratio by segment and customer unit
COMMENTARY Page 18: P&C – Combined ratio by segment and customer unit Looking at the FY-17 accident year combined ratio excluding catastrophes by segment and customer unit there is an underlying improvement in both the North and Latin American units and in the retail business. The EMEA accident year
Slide 60: Page 19: P&C – Investment result
COMMENTARY Page 19: P&C – Investment result The FY-17 investment result of USD 2,038m includes fair value movements of USD 191m, mainly from the Group’s hedge fund portfolio. Investment income was down 2% on a reported basis and 1% in local currency compared to the prior year. The decline was narrow
Slide 61: Page 20: Life – BOP by segment and source
COMMENTARY Page 20: Life – BOP by segment and source Global Life BOP increased 11% on a headline basis to USD 1,258m and 22% when adjusted for the impact of the change to the UK capital gains tax indexation relief announced in the 2017 budget and charges related to the group’s restructuring recogniz
Slide 62: Page 21: Life – New business
COMMENTARY Page 21: Life – New business FY-17 Global Life new business APE volumes increased 4% in headline terms to USD 4.9bn and 3% on a like-for-like basis excluding Australia and Malaysia Takaful acquisitions, with growth in EMEA, Asia Pacific and North America offsetting a decline in Latin Amer
Slide 63: Page 22: Life – Product mix and distribution
COMMENTARY Page 22: Life – Product mix and distribution During the year, the Group continued to focus on protection, unit-linked and corporate pension business, with these products accounting for 89% of APE sales. Unit-linked sales increased 22% compared to the prior year, while protection increased
Slide 64: Page 23: Life – Net inflows & AuM
COMMENTARY Page 23: Life – Net inflows & AuM Net inflows were positive over the year and equated to 3% of start of year asset balances and were at a similar level as the prior year. Lower volumes of low margin traditional savings business sold through the Group’s bank distribution partner Banco Saba
Slide 65: Page 24: Life Investment Result
COMMENTARY Page 24: Life Investment Result Life investment income, which is gross of policyholder sharing, decreased by 2% to USD 2.9bn, driven mainly by the gradual decline in overall earned portfolio yields and reduced equity dividends over the year. Reinvestment yields for debt securities were ar
Slide 66: Page 25: Farmers Exchanges – Growth
COMMENTARY Page 25: Farmers Exchanges – Growth The Farmers Exchanges showed continued growth in top-line in 2017. Gross written premiums for continuing operations increased by approximately 3% in the year. As in the first half of the year, this was partially offset by the run-off of discontinued ope
Slide 67: Page 26: Farmers Exchanges – Profitability
COMMENTARY Page 26: Farmers Exchanges – Profitability The underwriting performance of the Farmers Exchanges continued to improve through 2017. The combined ratio reduced 2.3ppts year-on-year to 101.6%, primarily driven by auto, which achieved a 5.5pt reduction. The positive trend was visible through
Slide 68: Page 27: Farmers Exchanges – Growth drivers
COMMENTARY Page 27: Farmers Exchanges – Growth drivers Having fallen in the first half of the year on the back of rate actions in the Farmers Exchanges, the Net Promoter Score has recovered over the second half of the year, with the ratio reaching a record high of 46.9 in the discrete December. As a
Slide 69: Page 28: FMS – Overview
COMMENTARY Page 28: FMS – Overview Farmers Management Services BOP decreased by USD 64m compared to prior year. Within this underlying growth was more than offset by the absence of a repeat of a one-time benefit of USD 86m related to the Farmers Pension Plan in the prior year. © Zurich February 8, 2
Slide 70: Page 29: Farmers Life and Farmers Re - Overview
COMMENTARY Page 29: Farmers Life and Farmers Re - Overview Farmers Re BOP increased by USD 15m in 2017, despite the non-recurrence of a USD 25m favorable retrospective accounting adjustment to unearned premium recorded in 2016. This was driven by a 3.2ppts improvement in the combined ratio, followin
Slide 71: Page 30: Group Functions and Operations & Non-Core Businesses - BOP
COMMENTARY Page 30: Group Functions and Operations & Non-Core Businesses - BOP Group Functions and Operations business operating loss improved USD 48m to USD 731m. Reduced headquarter costs were more than offset by lower recharges to the business units, while the Holding and Financing result benefit
Slide 72: Page 31: Group – Solvency ratios
COMMENTARY Page 31: Group – Solvency ratios The end-September Z-ECM ratio previously estimated at 136% was finalized at 138%. The estimate for end-December is 132%, which is 7ppts higher than at the start of the year. Strong operational capital generation from the businesses have added 11ppts, with
Slide 73: Page 32: Group – Swiss Solvency Test
COMMENTARY Page 32: Group – Swiss Solvency Test In 2017 the Group’s enhanced internal model was filed with FINMA, to which FINMA has responded with a number of model revisions. These are expected to result in a pro-forma reduction in the Group’s SST ratio of between 10 and 25 percentage points from
Slide 74: Page 33: Group – Balance sheet and capital structure
COMMENTARY Page 33: Group – Balance sheet and capital structure Shareholders’ equity increased USD 2.4bn to USD 33.1bn over the year. Retained earnings together with FX movements and a reduction in pension fund liabilities were the main drivers of the increase. As a result of the movements and the r
Slide 75: Page 34: Group – Cash remittances & dividend proposal
COMMENTARY Page 34: Group – Cash remittances & dividend proposal During the year the Group saw net remittances of USD 3.7bn, a level consistent with the Group’s target for remittances to exceed USD 9.5bn over the 2017-2019 period. The level of remittances has been driven both by operational earnings
Slide 76: For further information
For further information CALL US VISIT OR FOLLOW US Investor Relations Richard Burden +41 44 628 96 40 Francesco Bonsante +41 44 628 00 68 Gianni Vitale +41 44 625 48 26 Rating Agency Management Michèle Matlock +41 44 625 28 50 Investor Relations website Events Financial results and reports Patri
Slide 77: Calendar
CALENDAR: March 20-21, 2018, Morgan Stanley European Financials Conference 2018, London April 4, 2018, Annual General Meeting 2018 April 9-10, 2018, HSBC West Coast Financials Conference 2018, San Francisco May 9, 2018, Interim Management Statement for the three months ended March 31, 2018
Zurich Insurance Group — FY2017 Earnings Presentation on 6ix