Zurich Insurance Group Ltd · SIX:ZURN

Zurich Insurance — Debt Investor Presentation (November 2021)

28 slides from Zurich Insurance's debt investor presentation, November 2021

  1. Slide 1: Credit Investor Update

    Credit Investor Update November 2021

  2. Slide 2: Our proposition to investors

    GROUP OVERVIEW Our proposition to investors HIGHLY CASH GENERATIVE BUSINESS MODEL, SUPPORTED BY: A BALANCED AND INDUSTRY LEADING STABLE, CONSISTENT CONSISTENT GROWTH DIVERSE GLOBAL CAPITAL LEVELS AND CONSERVATIVELY WITH SCOPE TO BUSINESS MANAGED BALANCE Tackling climate RETURNS ENHANCE change SHEET

  3. Slide 3: We are well on track to deliver on our 2022 targets

    GROUP OVERVIEW We are well on track to deliver on our 2022 targets 2020 - 2022 TARGETS WE HAVE ADAPTED TO THE CHANGED ENVIRONMENT TO DELIVER 2020 – 2022 TARGETS Target HY-21 Commercial Taken advantage of BOPAT ROE >14% 13.0% favorable market conditions to improve profitability EPS ≥5% n.m. and quali

  4. Slide 4: We are on track to exceed our ROE target of >14% by FY-22

    GROUP OVERVIEW We are on track to exceed our ROE target of >14% by FY-22 ILLUSTRATIVE BOPAT ROE DEVELOPMENT (%) ~0.0-0.5% ~15% ~2.0-2.5% 13.0% ~0.5-1.0% ~0.0-0.5% ~0.5-1.0% ~0.5-1.0% HY-21 Growth in Investment income Business growth Productivity Portfolio quality Capital FY-22 equity base allocation

  5. Slide 5: A well diversified business with high quality sources of earnings

    GROUP OVERVIEW A well diversified business with high quality sources of earnings A TRULY COMPOSITE INSURER BALANCED P&C FOOTPRINT HIGH QUALITY LIFE EARNINGS MIX HY-21 Business operating profit by business (%)1 HY-21 Gross written premiums by region (%)2 HY-21 Life gross margin breakdown (%)3 5% 7% 1

  6. Slide 6: Genuinely global franchise with distinct capabilities

    GROUP OVERVIEW Genuinely global franchise with distinct capabilities NORTH AMERICA #4 in commercial insurance #2 in crop insurance ASIA PACIFIC #6 in US personal lines EMEA #5 in P&C, #1 in Life retail through Farmers Exchanges2 #2 in P&C direct #4 insurance company overall Top 3 #4 in P&C, #9 in Li

  7. Slide 7: Renewed and new distribution agreements are expanding the pool of addressable customers

    GROUP OVERVIEW Renewed and new distribution agreements are expanding the pool of addressable customers WE HAVE A PROVEN TRACK RECORD IN SUCCESSFULLY WE ARE CONTINUOUSLY EXPANDING OUR FOOTPRINT COLLABORATING WITH 3RD PARTY DISTRIBUTORS THROUGH NEW PARTNERSHIPS Renewed and new bank partnerships P&C di

  8. Slide 8: We are focused on further improving our return on capital in P&C and Life

    GROUP OVERVIEW We are focused on further improving our return on capital in P&C and Life RETURN ON RISK BASED CAPITAL PER SEGMENT1 Decision making process: P&C Farmers Life • Allocation decisions based on strategic priorities 12% 12% 12% 4% • Financial and other market trends are considered 13% 8% o

  9. Slide 9: P&C business has returned to growth, driven by both Retail and Commercial insurance

    PROPERTY & CASUALTY P&C business has returned to growth, driven by both Retail and Commercial insurance P&C GWP GROWTH (%)1 HY-21 P&C GWP GROWTH BY DRIVER (USDbn)2 COMMERCIAL 12% 9.3 0.5 0.2 +13% 8.2 0.7 Like-for-like1 6% 4% 1% 0% RETAIL AND SME 6.8 FY-17 FY-18 FY-19 FY-20 HY-21 0.4 +8% 6.3 0.0 Like

  10. Slide 10: Improved portfolio quality in commercial insurance positions us well for success through the cycle

    PROPERTY & CASUALTY Improved portfolio quality in commercial insurance positions us well for success through the cycle REBALANCED PORTFOLIO IMPROVED PROFITABILITY AND REDUCED VOLATILITY -14ppts 27% 34% 107% 100% 100% 97% 92% NEP by line of 2% business (%) 42% 32% Combined 22% 25% ratio (%) 9% 9% FY-

  11. Slide 11: Our Retail P&C business delivers a healthy performance and is growing despite challenging market conditions

    PROPERTY & CASUALTY Our Retail P&C business delivers a healthy performance and is growing despite challenging market conditions PORTFOLIO HEALTHY AND STABLE GROWING PORTFOLIO DESPITE PROFITABILITY OVER TIME CHALLENGING MARKET CONDITIONS FY-20 GWP (USDbn) Zurich Retail and SME combined ratio (%)1 GWP

  12. Slide 12: Our Life business is a key contributor to our earnings

    LIFE Our Life business is a key contributor to our earnings, supported by a unique and resilient distribution footprint OUR LIFE BUSINESS IS A KEY CONTRIBUTOR TO BOP BALANCED DISTRIBUTION MIX BOP by business (USDbn) 9M-21 Annual premium equivalent by pillar (%)1 2% 2.9 26% 33% 2.1 2.1 1.6 1.4 1.5 1.

  13. Slide 13: We have a strong focus on capital light products with less reliance on investment margins

    LIFE We have a strong focus on capital light products with less reliance on investment margins BUSINESS MIX WITH FOCUS ON CAPITAL LIGHT SHARE OF INCOME FROM FEES, LOADINGS AND PRODUCTS1 TECHNICAL MARGINS (%, AVERAGE FY-16 TO FY-20)2 9M-21 New business mix 8% 88% 15% 76% 75% 41% 64% APE (%) 4% -3% 35

  14. Slide 14: Farmers Exchanges with a truly nationwide presence and increased scale post MetLife acquisition

    FARMERS Farmers Exchanges1 with a truly nationwide presence and increased scale post MetLife acquisition FY-20 U.S. PERSONAL LINES P&C DWP (USDbn)2 A TOP 10 U.S. PERSONAL LINES PLAYER NATIONWIDE2 Change in market position / FY-20 pro-forma DWP (USDm) / pro-forma market share (%) State Farm 60.4 35.7

  15. Slide 15: Farmers Exchanges is focused on growing customer reach by expanding and diversifying distribution

    FARMERS Farmers Exchanges1 is focused on growing customer reach by expanding and diversifying distribution post acquisition TARGETED INITIATIVES HAVE RESULTED IN IMPROVED INCREASED NEW BUSINESS PRODUCTIVITY ACROSS ALL NEW BUSINESS PRODUCTIVITY DISTRIBUTION CHANNELS New business policy count (000s) •

  16. Slide 16: Strong capital position and cash generation

    INVESTMENT AND CAPITAL MANAGEMENT Strong capital position and cash generation VERY STRONG FINANCIAL STRONG CAPITAL POSITION, GROUP HIGHLY CASH GENERATIVE, CASH STRENGTH SWISS SOLVENCY TEST 1 (%) REMITTANCE (USDbn) 3.7 3.8 ~4.0 AA (very strong) / 240% 3.4 3.4 outlook ‘stable’ 221% 222% 0.2 0.1 216% 1

  17. Slide 17: Moderate leverage with interest cover at Aa levels

    INVESTMENT AND CAPITAL MANAGEMENT Moderate leverage with interest cover at Aa levels GROUP CAPITAL STRUCTURE (%)1 MOODY’S FINANCIAL LEVERAGE (%) & EARNINGS COVERAGE 9% 12% 11% 11% 10% 25.8% 16% 23.7% 16% 15% 16% 19% 22.6% 22.3% 13.2 12.3 75% 74% 74% 9.3 10.1 72% 71% FY-17 FY-18 FY-19 FY-20 HY-21 FY-

  18. Slide 18: Low average debt cost and balanced maturity profile

    INVESTMENT AND CAPITAL MANAGEMENT Low average debt cost and balanced maturity profile CDS SPREAD AMONG BEST OF PEERS (BPS)1 BALANCED REFINANCING NEEDS (USDbn)2 600 2.2 400 2.1 2.0 200 0.2 0.6 1.8 0.2 1.7 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Zurich Axa Generali Allianz 0.5 0.8

  19. Slide 19: Conservative investment portfolio focused on high asset quality

    INVESTMENT AND CAPITAL MANAGEMENT Conservative investment portfolio focused on high asset quality HY-21 GROUP INVESTMENTS (%)1 HY-21 ASSET QUALITY (%) HY-21 DURATION (# YEARS)2 11.5 5% USD 73bn USD 97bn 10.2 5% 2% 2% 0% 6% 1% 7% 33% 25% 2% 36% 3% USD 217bn 4.9 4.8 46% 25% 14% 45% 23% 18% Government

  20. Slide 20: We are taking decisive steps in our sustainability strategy

    SUSTAINABILITY We are taking decisive steps in our sustainability strategy OUR 1.5˚C FUTURE CONFIDENCE IN A WORK DIGITAL SOCIETY SUSTAINABILITY • Committed to no longer underwrite • Global implementation of Data • Increased gender diversity new greenfield oil exploration commitment almost completed

  21. Slide 21: Zurich is highly rated by external assessors

    SUSTAINABILITY Zurich is highly rated by external assessors OUR RATINGS1 OUR LONG-TERM COMMITMENT ‘AA’ rating1 In Top 1% of insurance peer group2 Absolute Score of 4.2 (out of 5.0)3 • Lead author of the World Economic Forum Global Risk Report • Founding member of the Net Zero Asset Owner Alliance ‘A

  22. Slide 22: Appendix

    @ ZURICH Appendix

  23. Slide 23: SST is more conservative than Solvency II

    APPENDIX - CAPITAL MANAGEMENT SST is more conservative than Solvency II General information SST SOLVENCY II Most onerous impact Risk measure Expected shortfall 99% (~BBB) Value at risk 99.5% (~BBB) • Market risk (including investment Internal model (ZIP): Standard formula (other entities): credit) •

  24. Slide 24: SST is more conservative than Solvency II

    APPENDIX - CAPITAL MANAGEMENT SST is more conservative than Solvency II Yield curves and transitionals SST1 SOLVENCY II Most onerous impact Swaps (EUR, USD, CHF) Swaps (EUR, GBP, USD), SONIA rates (GBP) and Base for risk-free yield curves SONIA rates (GBP for UK entities) and LIBOR (GBP for Governme

  25. Slide 25: Other important information

    Other important information

  26. Slide 26: 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

  27. Slide 27: For further information

    For further information CALL US VISIT OR FOLLOW US INVESTOR RELATIONS AND RATING AGENCY MANAGEMENT Jon Hocking +41 44 628 18 34 Francesco Bonsante +41 44 628 00 68 Samuel Han +41 44 625 32 57 Michèle Matlock +41 44 625 28 50 Fabian Wiederkehr +41 44 625 33 08 Investor. relations@zurich.com  Investo

  28. Slide 28: Thank you

    Thank you UPCOMING EVENTS • February 10, 2022 – Annual Results 2021 • April 6, 2022 – Annual General Meeting 2022 • May 12, 2022 – Update for the three months ended March 31, 2022 • August 11, 2022 – Half year results 2022 • November 10, 2022 – Update for the nine months ended September 30, 2022 © Z

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