Slide 1: Strong results, executing on strategic priorities
Strong results, executing on strategic priorities Annual results 2020 February 11, 2021 Investor and media presentation Zurich Insurance Group
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) P&C reinsurance program Life Farmers Exchanges details by line
Slide 3: Key messages
Key messages Strong results with Strong FY-20 performance with BOP of USD 4.2bn against challenging backdrop with second half growth return to growth in second half Executing on strategic Customer and employee satisfaction scores increased; Digitalization of business and priorities offering expanded
Slide 4: Actions during the crisis have earned the trust of our stakeholders
KEY HIGHLIGHTS Actions during the crisis have earned the trust and confidence of our stakeholders, while our ESG approach is well recognized STRENGTHENED CUSTOMER FOCUS HIGHER EMPLOYEE SATISFACTION INDUSTRY LEADING ESG RATINGS3 Retail NPS move2 NPS place to work ‘AA’ rating 1 +3 +22 +7 #1 in insuran
Slide 5: Executing on our customer focused strategy
KEY HIGHLIGHTS We are executing on our customer focused strategy and have continued executing on strategic priorities EXPANDED DISTRIBUTION INNOVATION AND DIGITAL SERVICES FARMERS STRENGTHENED Extended distribution agreement with Global Business Platforms unit created Acquisition of MetLife’s U.S. P
Slide 6: Significant improvement in second half of the year
KEY HIGHLIGHTS Significant improvement in second half of the year BOP GROWTH (%) P&C AY CR EXCL. CATASTROPHES TOPLINE (%) AND COVID-19 (%) Group P&C GWP growth 2% Improvement vs. prior year 6% 4.4% 2% -40% 0.7% P&C Life APE growth 9% H1-20 H2-20 -7% H2-20 vs. H1-20 -55% -25% -1.7ppt Life FMS MGEP ma
Slide 7: Adapted plans, expect to meet 2020-2022 targets
KEY HIGHLIGHTS We have adapted plans to the changed environment and expect to meet our 2020 – 2022 targets ILLUSTRATIVE BOPAT ROE DEVELOPMENT (%) ~15% ~0.0-0.5% 14.2% ~2.0-2.5% ~1.5-2.0% ~0.5-1.0% ~1.5-2.0% ~1.0-1.5% FY-19 Growth in Investment income Business growth Productivity Portfolio quality Ca
Slide 8: Leading global commercial insurer with strong growth and pricing
KEY HIGHLIGHTS A leading global commercial insurer with strong growth, continued strong pricing and improved terms and conditions P&C COMMERCIAL P&C COMMERCIAL RATE CHANGE3 IMPROVED TERMS & CONDITIONS North America Increased use of Zurich standard wordings 66% 18% 18% 18% Commercial share of FY-20 P
Slide 9: Retail business resilient, travel faces slow recovery
KEY HIGHLIGHTS Retail business has been resilient with GWP recovering in the second half, travel business faces a slow recovery P&C RETAIL AND SME P&C RETAIL AND SME GWP GROWTH2 COVER-MORE 5% EMEA Gross sales growth (%) 34% (73% of FY-20 GWP) 1% Retail share of FY-20 P&C GWP1 6% Asia Pacific, excl.
Slide 10: Life business well positioned for low yields
KEY HIGHLIGHTS Life business well positioned for ongoing low yields with focus on protection and capital light savings FY-19 SPLIT GROSS RESERVES & LIABILITIES (%) FY-20 NEW BUSINESS APE MIX (%) By line of business 12% Protection 18% 20% 20% 38% 20% USD Unit-linked 3,625m Corporate savings 59% Savin
Slide 11: Stable dividend proposed for 2020; on track for 2022 targets
KEY HIGHLIGHTS 2019 dividend paid as scheduled with stable dividend proposed for 2020; On track to meet 2022 targets DIVIDEND PER SHARE (CHF) 2020 – 2022 AMBITION +4% 20 20 BOPAT ROE2 >14% 19 18 17 Cumulative cash remittances USD >11.5bn SST3 >160% FY-16 FY-17 FY-18 FY-19 FY-201 Earnings per share g
Slide 12: Well positioned for future success
KEY HIGHLIGHTS Well positioned for future success RESILIENT RESPONSIBLE AND BUSINESS MODEL CLEAR STRATEGY IMPACTFUL BUSINESS A balanced and diverse Focus on customer Tackling climate change global business Industry leading capital Inspiring confidence in a levels with conservatively Simplify digital
Slide 13: CFO update
@ ZURICH CFO update
Slide 14: COVID-19 remains an earnings event
GROUP – COVID-19 IMPACT COVID-19 remains an earnings event; P&C claims net of frequency benefits stable at USD 450m FY-20 COVID-19 GROUP BOP IMPACT (USDm)1 FY-20 PROPERTY & CASUALTY CLAIMS P&C claims2 821 USD 14% 2% Property P&C frequency benefits, premium refunds and voluntary actions 371 450m 12%
Slide 15: Group BOP returned to growth in second half
GROUP – BUSINESS OPERATING PROFIT Group BOP returned to growth in second half, with annual development driven by COVID-19, catastrophe losses and FX BOP BY REGION (USDm) BOP BY BUSINESS (USDm) GROUP BOP (USDm) -20% -20% +2% 5,302 5,302 2,487 2,540 508 440 4,241 4,241 1,707 457 1,707 317 1,501 1,501
Slide 16: Net income attributable to shareholders
GROUP – NET INCOME ATTRIBUTABLE TO SHAREHOLDERS More modest decline in net income attributable to shareholders due to higher realized gains BOP TO NIAS WALK (USDm) 23.9% Tax rate -363 57 1,080 -1,277 332 238 4,241 3,834 FY-20 BOP Realized capital gains/losses Restructuring Gain on disposal Income ta
Slide 17: 2021 outlook
GROUP – OUTLOOK 2021 outlook • Commercial pricing expected to increase further over 2021 with rate in excess of loss cost inflation • Mid-single digit growth in net earned premiums • Losses from natural catastrophes expected to be around ~3.5ppts PROPERTY & CASUALTY • Investment income expected to d
Slide 18: P&C topline: commercial rate increases driving GWP growth
P&C – TOPLINE Commercial rate increases driving GWP growth; APAC and LatAm reductions driven by travel and extended warranty FY-20 TOPLINE DEVELOPMENT (%) TOTAL RATE CHANGE (%)2 GWP like-for-like GWP (USDm) Rate change (%)2 Rate change outlook growth (%)1 8% EMEA 15,839 6% 5% Stable North America 16
Slide 19: P&C BOP components
P&C – BOP COMPONENTS COVID-19, higher catastrophes and lower investment income explain FY-20 development BOP (USDm) BREAK DOWN BY COMPONENT (USDm) -28% 3,115 2,878 2,878 491 305 240 211 236 450 94 2,080 2,080 239 305 1,740 48 1,578 1,961 1,396 1,740 1,395 1,117 922 755 423 -292 -357 -216 -388 -326 F
Slide 20: P&C combined ratio details
P&C – COMBINED RATIO DETAILS ~2.6ppts improvement in accident year combined ratio excluding catastrophes and COVID-19 COMBINED RATIO (%) -2.6ppts LOSS RATIO (%) -2.3ppts EXPENSE RATIO (%) -0.4ppts AY excl. COVID-19 and AY excl. COVID-19 and Excl. COVID-19 catastrophes catastrophes 96.4% 98.4% 96.6%
Slide 21: Combined ratio by segment and customer unit
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) EX CATASTROPHES AND COVID BY SEGMENT (%)1 AY CR EX CATASTROPHES AND COVID BY CUSTOMER UNIT (%)1 -1.5ppts -0.4ppts +0.2ppts -4.6ppts -0
Slide 22: P&C investment result
P&C – INVESTMENT RESULT Investment result driven by lower yields partially offset by higher hedge fund gains INVESTMENT RESULT IN BOP (USDm) INVESTMENT INCOME YIELD OF GROUP INVESTMENTS (%)1 3.0% 2.7% 2,171 2,045 211 305 FY-19 FY-20 1,961 1,740 BOOK & REINVESTMENT YIELD OF DEBT SECURITIES (%)2 FY-19
Slide 23: Life BOP up 7% excluding COVID-19
LIFE – BUSINESS OPERATING PROFIT Underlying Life BOP excluding COVID-19 effects up 7% BOP (USDm) BOP EXCLUDING COVID-19 IMPACT (USDm) +7% excl. COVID-19 impact -4% 1,486 57 1,597 1,423 117 6 1,423 4 269 4 236 219 4 219 204 270 269 269 1,037 945 1,098 945 -30 -13 -13 -12 FY-19 FY-20 FY-20 Claims and
Slide 24: Life BOP by source of earnings
LIFE – BUSINESS OPERATING PROFIT BY SOURCE OF EARNINGS Life BOP ex-COVID up 7%, with higher technical margin and fees BUSINESS OPERATING PROFIT BY SOURCE OF EARNINGS (USDm) KEY DRIVERS FY-20 vs. FY-19 (%)1 Income from loadings Actual excl. COVID-19 89% & fees and technical margins Loadings & fees 2,
Slide 25: 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) -4% -21% like-for-like1 like-for-like1 +10% -18% -32% 33,479 6.3 303 3,648 275 15 4 8 44 2
Slide 26: Life new business and new business mix
LIFE – NEW BUSINESS AND NEW BUSINESS MIX Protection and capital efficient savings products account for ~88% of APE and ~100% of NBV APE (USDm)1 NBV (USDm)1 NBM (%)1 NEW BUSINESS MIX (%) -7% -16% FY-20 APE1 like-for-like2 like-for-like2 12% -16% -19% 38% 20% USD 4,331 976 25.8% 25.1% 3,625m 3,625 140
Slide 27: 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 2.7% 2.4% 3,821 906 3,239 486 FY-19 FY-20 2,915 2,753 BOOK & REINVESTMENT YIELD OF DE
Slide 28: Farmers Exchanges overview
FARMERS EXCHANGES1 – OVERVIEW Stable top line at Farmers Exchanges1 before customer premium credits with further improvement in surplus GWP (USDm) NPS / RETENTION (%) COMBINED RATIO (%)2 SURPLUS 0% excl. COVID-19 impact -3% 20,656 20,108 50.4 100.0% 100.7% 41.5% 43.3% 6.8% 10.5% 47.6 6.0 6.2 82.7% 8
Slide 29: Farmers Management Services overview
FARMERS MANAGEMENT SERVICES – OVERVIEW Customer premium credits at Farmers Exchanges1 drive reduction in fees with no offset to costs BUSINESS OPERATING PROFIT (USDm) MGEP MARGIN (%)1 1,456 1,414 7.0% 6.9% 1,375 6.8% 33 18 18 1,424 1,357 1,396 FY-19 FY-20 FY-20 excl. FY-19 FY-20 FY-20 excl. COVID-19
Slide 30: Farmers Life and Farmers Re overview
FARMERS LIFE AND FARMERS RE – OVERVIEW Farmers Life with strong growth in new business value, BOP impacted by COVID related mortality BOP (USDm) FARMERS LIFE APE FARMERS LIFE NBV FARMERS LIFE NBM (%)1 (USDm)1 (USDm)1 250 82 121 162% 15 75 93 177 113% 26 126 236 26 151 100 FY-19 FY-20 FY-20 excl. FY-
Slide 31: Group Functions and Operations & Non-Core Businesses BOP
GROUP FUNCTIONS AND OPERATIONS & NON-CORE BUSINESSES – BOP Further reduction in net cost of Group Functions and Operations; Non-Core Business impacted by COVID-19 GROUP FUNCTIONS AND OPERATIONS BOP (USDm) NON-CORE BUSINESS BOP (USDm) -268 -356 -9 -449 -353 -709 -52 -716 -54 FY-19 FY-20 FY-19 FY-20 F
Slide 32: Group solvency: SST ratio of 182%
GROUP – SOLVENCY Strong capital position with SST ratio of 182% at December 31 Q4 SST RATIO DEVELOPMENT (%)1 COMMENTARY • Update following changes to estimation process to improve 193% -3% accuracy 7% -6% • Strong economic capital -8% 185% 6% -3% generation 182% -3% • Market movements in-line with s
Slide 33: New SST target capital of 160% or above
GROUP – SOLVENCY TARGET New SST target capital of “160% or above” equivalent to AA level of capital; Approach to capital management unchanged GROUP SOLVENCY DEVELOPMENT TARGET CAPITALIZATION (%) Q1-20 SST VS. SOLVENCY II FOR (%) EUROPEAN UNION ENTITIES (%) 240% 221% 222% 240% 216% 204% ~90ppts 200%
Slide 34: Balance sheet and capital structure
GROUP – BALANCE SHEET AND CAPITAL STRUCTURE Increased shareholders equity and stable Group capital structure SHAREHOLDERS’ EQUITY (USDm) CAPITAL STRUCTURE (%)1 +9% 38,278 81 11% 11% 3,834 -3,080 1,788 35,004 651 15% 16% 74% 74% FY-19 NIAS Dividend Currency Net Pension FY-20 FY-19 FY-202 translation
Slide 35: Cash remittances and dividend proposal
GROUP – CASH REMITTANCES AND DIVIDEND PROPOSAL Continued strong cash remittance; CHF 20 dividend proposed CASH REMITTANCES (USDbn) DIVIDEND PER SHARE (CHF) +4% 3.8 3.4 20 20 3.4 0.2 0.1 19 18 1.4 1.2 1.4 17 0.9 0.7 1.5 2.3 2.3 1.5 -0.1 -0.8 -0.9 -1.0 FY-18 FY-19 FY-20 FY-16 FY-17 FY-18 FY-19 FY-201
Slide 36: 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 37: Appendix
@ ZURICH Appendix
Slide 38: Dividend policy
GROUP – DIVIDEND POLICY We are focused on continuing to reward our shareholders DIVIDEND POLICY1 DIVIDEND PER SHARE (CHF) +4% NIAS2 payout ratio of ~75% 20 20 19 18 17 Dividend increases based on sustainable earnings growth FY-16 FY-17 FY-18 FY-19 FY-201 Minimum target of prior year level © Zurich 1
Slide 39: P&C reinsurance program
P&C – REINSURANCE PROGRAM Balance sheet and large loss volatility well managed through reinsurance GROUP CATASTROPHE REINSURANCE PROTECTION GLOBAL SURETY EXCESS OF LOSS (USDm) • Designed to manage earnings volatility • North America: USD 325m coverage per customer in excess 200 of USD 75m retention
Slide 40: 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 (%) 20,656 20,108 13,665 13,349 292 293 545 2,120 398 559 101.5% 1,935 384 Auto 95.2% 2,652 2,796 3,279 3,346 99.2% Hom
Slide 41: Group solvency: capital generation and SST movements
GROUP – SOLVENCY Strong underlying capital generation with SST impacted by movements in key economic variables over the year -4% 222% 20% -45% -1% 3% -12% 182% SST ratio (%)1 -24% Interest rates -16% Market volatilities -5% Other FY-19 Economic profit / COVID-19 impact Market Experience Other Capita
Slide 42: Strong capital position and sensitivities
GROUP – SOLVENCY Strong capital position GROUP SWISS SOLVENCY TEST (%)1 9M-20 SST SENSITIVITIES IMPACT (ppts)2 300% Interest rate +50bps +15ppts 221% 222% Interest rate -50bps -19ppts 216% 204% 200% 189% 182% USD appreciation +10% +1ppts USD depreciation -10% -2ppts Equities +20% +8ppts 100% Equitie
Slide 43: Well diversified capital base by risk type
GROUP – SST COMPONENTS Well diversified capital base by risk type FY-20 AVAILABLE FINANCIAL RESOURCES (USDbn) FY-20 RISK CAPITAL SPLIT (%)1 1% Market risk 4% Shareholders equity 38.3 9% Premium and reserve risk 4% Business risk 14% Dividend accrual -3.3 Life insurance risk 68% Natural catastrophe ri
Slide 44: Low average debt cost and balanced maturity profile
GROUP – DEBT Low average debt cost and balanced maturity profile DEBT (USDbn) AND AVERAGE DEBT COST (%) BALANCED REFINANCING NEEDS (USDbn)1 13.8 2.2 2.1 12.0 Average debt 0.2 FY-19 FY-20 0.6 1.8 1.8 cost (%) 1.7 8.3 Subordinated 4.6% 4.2% 0.5 1.3 6.9 0.8 1.2 Senior 1.4% 1.5% 0.4 1.9 Total 3.3% 3.1%
Slide 45: Conservative investment portfolio
GROUP – INVESTMENT PORTFOLIO Conservative investment portfolio with low exposure to industries most stressed by the crisis FY-20 GROUP INVESTMENTS (%)1 FY-20 ASSET QUALITY (%) FY-20 NON-FINANCIAL CREDIT BY SECTOR (%) USD 78bn USD 99bn Transportation2 Technology 6% 2% 0% 1% Government Other 5% 2% 5%
Slide 46: Highly diversified credit and private debt portfolio
GROUP – INVESTMENT PORTFOLIO Highly diversified credit and private debt portfolio FY-20 RATING OF CREDIT, PRIVATE DEBT SECURITIES (%) USD 31.7bn USD 22.1bn USD 18.1bn USD 8.6bn USD 6.6bn USD 11.8bn 1% 2% 1% 1% 1% 3% 7% 12% 4% 1% 4% 21% 29% 18% 50% 54% 36% 51% 89% 67% 21% 39% 30% 2% 18% 21% 7% 6% 1%
Slide 47: Alternative markets 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 48: 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 (L-F-L) GROWTH FY-20 FY-19 (USDm) FY-20 (USDm) FY-20 COVID-19 L-F-L KPI combined ratio KPI combined ratio impact1 Rep M&A Adj Rep FX M&A2 Adj2 (%) excl. COVID-191
Slide 49: Commentary
@ ZURICH Commentary
Slide 50: Page 3: Key messages (1/2)
COMMENTARY Page 3: Key messages (1/2) The Group’s results demonstrated a strong performance against a challenging backdrop of the global pandemic, recession and elevated natural catastrophes, with growth in business operating profit returning in the second half of the year. Business operating profit
Slide 51: Page 3: Key messages (continued 2/2)
COMMENTARY Page 3: Key messages (continued 2/2) The impact of the COVID-19 outbreak has remained an earnings event. P&C claims net of reinsurance and related frequency reductions were USD 450m for the full year, in-line with the level indicated with the first half results. Including the impact on Li
Slide 52: Page 4: Actions during the crisis
COMMENTARY Page 4: Key highlights – Actions during the crisis have earned the trust and confidence of our stakeholders, while our ESG approach is well recognized Post the outbreak of COVID-19 around the world the Group’s priorities have been to protect employees while supporting customers and the co
Slide 53: Page 5: Executing on customer focused strategy
COMMENTARY Page 5: Key highlights – We are executing on our customer focused strategy and have continued executing on strategic priorities During the year, the Group continued to develop its successful bancassurance and distribution partnership strategy. The long-standing agreement with Deutsche Ban
Slide 54: Page 6: Significant improvement in second half
COMMENTARY Page 6: Key highlights – Significant improvement in second half of the year The second half of the year saw a recovery across the Group’s business with business operating profits returning to growth despite continued elevated catastrophe losses and ongoing effects from the COVID-19 outbre
Slide 55: Page 7: Adapted plans, 2020-2022 targets
COMMENTARY Page 7: Key highlights – We have adapted plans to the changed environment and expect to meet our 2020 – 2022 targets The Group reacted quickly to adapt its plans to reflect the changed macro-economic conditions brought on by the global pandemic and continues to expect to meet the targets
Slide 56: Page 8: Leading global commercial insurer
COMMENTARY Page 8: Key highlights – A leading global commercial insurer with strong growth, improved pricing and terms and conditions 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-
Slide 57: Page 9: Retail business resilient
COMMENTARY Page 9: Key highlights – Retail business has been resilient with GWP recovering in the second half but travel business faces a slow recovery The Group’s retail and SME business, which represents 34% of P&C gross written premiums, remained resilient throughout the year, with gross written
Slide 58: Page 10: Life business well positioned
COMMENTARY Page 10: Key highlights – Life business well positioned with limited exposure to traditional saving business 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 envir
Slide 59: Page 11: Stable dividend proposal
COMMENTARY Page 11: Key highlights – Stable dividend proposal and on track to meet 2022 targets 2020 was an unprecedented year with high market volatility and uncertainty, the impact of the COVID-19 pandemic, a global recession, and elevated levels of catastrophe losses. Against this backdrop, the G
Slide 60: Page 12: Well positioned for future success
COMMENTARY Page 12: Key highlights – Well positioned for future success 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 focuse
Slide 61: Page 14: Group COVID-19 impact
COMMENTARY Page 14: Group – COVID-19 impact As indicated previously the overall impact of the COVID-19 outbreak has remained an earnings event for the Group. The overall net impact on the P&C underwriting result is USD 450m after considering claims and offsetting frequency benefits as well as premiu
Slide 62: Page 15: Group business operating profit
COMMENTARY Page 15: Group – Business operating profit Overall Group business operating profit recovered strongly over the second half of the year, with BOP in the second half of the year growing 2.1% to leave full year business operating profit 20% below the prior year level as a result of the impac
Slide 63: Page 16: Group NIAS
COMMENTARY Page 16: Group – NIAS Net income attributable to shareholders (NIAS) fell 8% in the year, driven by the decline in BOP which was compensated primarily by higher realized capital gains on equities and real estate, a positive gain on disposal compared to a loss in the prior year, and lower
Slide 64: Page 17: Group 2021 outlook
COMMENTARY Page 17: Group – 2021 outlook P&C: The Group expects further hardening of pricing over 2021 with price increases expected to remain ahead of loss cost inflation over the year. Based on FX rates as at the end of January 2021 this is expected to lead to mid-single digit growth in net earned
Slide 65: Page 18: P&C top line
COMMENTARY Page 18: P&C – Top line Gross written premiums in Property & Casualty (P&C) for 2020 increased 4% in U.S. dollars and on a like-for-like basis, after adjusting for currency movements and closed acquisitions and disposals. Growth was driven by EMEA and North America. Growth was supported b
Slide 66: Page 19: P&C BOP components
COMMENTARY Page 19: P&C – BOP components FY-20 P&C BOP was USD 2,080 million, 28% lower than in the previous year. The decline was mainly driven by the impact of the COVID-19 outbreak, higher catastrophe losses than in the previous year, as well as a lower investment result. The overall impact of th
Slide 67: Page 20: P&C combined ratio details
COMMENTARY Page 20: P&C – Combined ratio details The FY-20 combined ratio of 98.4% was 2 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 2.6 percentage points. The accid
Slide 68: Page 21: Combined ratio by segment and customer unit
COMMENTARY Page 21: P&C – Combined ratio by segment and customer unit In EMEA, the accident year combined ratio ex-catastrophes improved by 1.5 percentage points after removing the impact of COVID-19 related frequency benefits and voluntary actions to support customers during the outbreak. In North
Slide 69: Page 22: P&C investment result
COMMENTARY Page 22: P&C – Investment result Investment income was USD 220 million below prior year primarily due to lower investment yields. Realized capital gains of USD 305 million were USD 94 million above the 2019 result mainly driven by a strong hedge funds performance in the second half of the
Slide 70: Page 23: Life business operating profit
COMMENTARY Page 23: Life – Business operating profit Life BOP for FY-20 was USD 1,423m, 4% below the prior year. Excluding COVID-19 effects of USD 173m life BOP grew 7% despite adverse movements in exchange rates and lower contributions from favorable one-off items mainly in EMEA. As anticipated at
Slide 71: Page 24: Life BOP by source of earnings
COMMENTARY Page 24: 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 89% of income coming from loadings and fees together with technical margins. Viewed by margin and excluding the imp
Slide 72: Page 25: Life premiums, net inflows and AuM
COMMENTARY Page 25: Life – Premiums, net inflows and assets under management In the Group’s Life business, gross written premiums and deposits were down 18% in FY-20 compared to FY-19 on a reported basis, and down 4% on a like-for-like basis, adjusting for currency movements, acquisitions and dispos
Slide 73: Page 26: Life new business and mix
COMMENTARY Page 26: Life – New business and new business mix In 2020, Life new business annual premium equivalent (APE) sales decreased 7% on a like-for-like basis, adjusting for currency movements, acquisitions and disposals. The decline in sales was largely driven by government-imposed restriction
Slide 74: Page 27: Life investment result
COMMENTARY Page 27: Life – Investment result Life investment result, which is gross of policyholder sharing, decreased by 15% to USD 3.2bn in U.S. dollars, driven mainly by lower realized capital gains in the first half of the year compared with 2019. © Zurich February 11, 2021 Annual results 2020 7
Slide 75: Page 28: Farmers Exchanges overview
COMMENTARY Page 28: Farmers Exchanges – Overview Gross written premiums at the Farmers Exchanges decreased 3%. Excluding USD 311m of COVID-19 related premium credits and lower volumes of commercial rideshare business following measures initiated by U.S. states in response to the COVID-19 outbreak, g
Slide 76: Page 29: FMS overview
COMMENTARY Page 29: FMS – Overview Farmers Management Services (FMS) BOP decreased 6% compared to the prior year. This was mainly driven by reduced fee revenues as a result of USD 311m of premium credits to customers at the Farmers Exchanges in the first half of the year. As a result, the managed gr
Slide 77: Page 30: Farmers Life and Farmers Re overview
COMMENTARY Page 30: Farmers Life and Farmers Re – Overview Farmers Life BOP of USD 100m was 58% lower than in the prior year. The result was mainly driven by higher mortality compared with a favorable experience in the prior year and annual assumption updates. This includes USD 45m of claims related
Slide 78: Page 31: Group Functions and Non-Core BOP
COMMENTARY Page 31: Group Functions and Operations & Non-Core Businesses – BOP The business operating loss reported under Group Functions and Operations improved by USD 7 million to USD 709 million. This was driven by a USD 96 million reduction in Holding and Financing costs due to lower interest ex
Slide 79: Page 32: Group solvency
COMMENTARY Page 32: Group – Solvency Following improvements to the quarterly estimation process for the SST ratio, the Group revised its Q3 estimate of the SST ratio from 193% to 185%. Other capital metrics were not impacted by this change. Z-ECM at December 31 is estimated at 115%, an increase from
Slide 80: Page 33: Group solvency target
COMMENTARY Page 33: Group – Solvency target As indicated with the nine-month results, the Group will report solely on SST going forward and has introduced a new target capital on this basis. Over time the relationship between the Group’s Swiss Solvency Test ratio and the previously reported Z-ECM ra
Slide 81: Page 34: Balance sheet and capital structure
COMMENTARY Page 34: Group – Balance sheet and capital structure Shareholders’ equity increased by USD 3.3bn mainly driven by an increase of USD 1.8bn in net unrealized gains and net income of USD 3.8bn partly offset by the payment of the Group dividend of USD 3.1bn in the second quarter. Other items
Slide 82: Page 35: Cash remittances and dividend proposal
COMMENTARY Page 35: Group – Cash Remittances and dividend proposal During 2020, the Group continued to successfully convert earnings into distributable cash with overall Group remittances of USD 3.4bn on the same level as in the prior year level and equivalent to 90% of net income attributable to sh
Slide 83: 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 Fabian Wiederkehr +41 44 625 33 08 EVENTS
Slide 84: Thank you
Thank you UPCOMING EVENTS • April 7, 2021, Annual General Meeting 2021 • March 16-18, 2021, Morgan Stanley European Financials Conference 2021 • March 29-30, 2021, HSBC U.S. West Coast Financials Conference 2021 • May 12, 2021, Update for the three months ended March 31, 2021 • August 12, 2021, Half