Zurich Insurance Group Ltd · SIX:ZURN

Zurich Insurance — FY2024 Earnings Presentation

67 slides from Zurich Insurance's earnings presentation, Feb 20, 2025

  1. Slide 1: Setting the pace – Annual results 2024

    Setting the pace Annual results 2024 February 20, 2025 Investor and media presentation Zurich Insurance Group © Zurich

  2. Slide 2: Content

    Content Use symbols to navigate through the document Main sections Other important information Key highlights Disclaimer Group results and outlook Dividend policy Property & Casualty (P&C) Additional KPIs Life P&C reinsurance program Farmers Farmers Exchanges details by line of business Group Functi

  3. Slide 3: Key highlights

    Key highlights 3 © Zurich

  4. Slide 4: Key messages

    Key messages Successful execution of the FY-24 confirms strong delivery, outpacing 2023-2025 targets. Successful track record over the last plan 2023-2025 plan cycles bodes well for our future ambition P&C producing record top- P&C BOP of USD 4.2bn up 8%. Combined ratio improved to 94.2%. Gross writ

  5. Slide 5: FY-24 confirms strong delivery, outpacing 2023-2025 targets

    Key highlights FY-24 confirms strong delivery, outpacing 2023-2025 targets Core ROE (%)1 Cash remittances EPS growth (%)2 SST (%)4 (USDbn) 24.6% 15% 252% >20% FY-25 >13.5 ≥160% 8% FY-24 7.1 FY-23 4.8 FY-24 Target Cumulative Target FY-24 vs. FY-22 Target FY-24e Target 2023-2025 2023-2025 2023-2025 CA

  6. Slide 6: 2025-2027 targets raising the bar

    Key highlights 2025-2027 targets raising the bar Business targets Financial targets • BOP >USD 4.2bn in FY-27 Commercial • Middle Market GWP1 >USD 10bn in FY-27 Core EPS2 Core ROE3 Cash • Return to long-term level of profitability Retail • Accelerate focus on customer loyalization CAGR >9% >23% remi

  7. Slide 7: Robust profit growth, excellent return on equity and cash conversion

    Key highlights Robust profit growth, excellent return on equity and cash conversion, delivering durable growth Core EPS (USD)1 Core ROE (%)1,2 Cash remittances (USDbn) >51.9 24.6% >19 23.0% >23% 7.1 +8% CAGR 40.1 37.8 34.2 15.7% 14.2% 4.6 4.8 29.5 14.0% 4.4 27.4 11.0% 3.4 3.4 21.5 FY-22 FY-23 FY-27

  8. Slide 8: Strong conversion of earnings into distributable cash

    Key highlights Strong conversion of earnings into distributable cash Group BOP (USDbn)1 Group NIAS (USDbn)1,2 Dividend per share (CHF) +7% CAGR +8% CAGR 7.8 5.8 +7% CAGR 28 7.4 5.2 26 6.5 24 4.6 5.7 4.1 4.4 22 5.3 3.8 20 20 4.2 FY-19 FY-20 FY-21 FY-22 FY-23 FY-24 FY-19 FY-20 FY-21 FY-22 FY-23 FY-24

  9. Slide 9: Continuous improvement in P&C underlying combined ratio

    Key highlights Continuous improvement in P&C underlying combined ratio P&C – Group (%) P&C - Commercial (%) P&C – Retail (%) -0.3ppts -0.5ppts -0.3ppts 93.0% 92.7% 90.7% 90.2% 97.3% 97.0% FY-23 FY-24 FY-23 FY-24 FY-23 FY-24 6% 4% 7% 4% 4% 5% AY combined ratio ex cat % Rate change February 20, 2025 A

  10. Slide 10: Commercial P&C to accelerate growth and improve portfolio composition

    Key highlights Commercial P&C to accelerate growth and further improve the portfolio composition P&C GWP growth by driver - Commercial (USDm)1 Middle Market GWP and Commercial BOP (USDbn) >10.0 7.7 +4% 27,243 FY-24 FY-27 620 19 >4.2 524 3.4 26,080 FY-23 Rate change Exposure change Net new business F

  11. Slide 11: Retail P&C with disciplined growth supported by improving motor rates

    Key highlights Retail P&C with disciplined growth in new business volumes supported by improving motor rates in EMEA P&C GWP growth by driver - Retail and SME (USDm)1 EMEA Motor Retail – Rate change (%) +11% 20 16,738 15 10 949 5 206 0 506 15,076 -5 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1

  12. Slide 12: Life reports a record high level of BOP

    Key highlights Life reports a record high level of BOP, underpinned by a capital-efficient balance sheet Life reserves and liabilities (%)1 Life BOP (USDbn)2 +9% CAGR 2.2 2.1 2.0 26% 1.8 36% 4% 1.5 1.4 5% 70% 59% FY-19 FY-24 FY-19 FY-20 FY-21 FY-22 FY-23 FY-24 Unit-linked and investment contracts Tr

  13. Slide 13: Stepping up capabilities to drive growth in Protection business

    Key highlights We are stepping up capabilities to drive growth in highly attractive Protection business Strategic priorities Protection GWP growth (USDbn)1 Protection GWP and BOP contribution, FY-24 (USDbn)2 8.7 1.5 +8% Margin (%) Customer experience CAGR Short-term +5% 2.8 19% Technical contracts 0

  14. Slide 14: Farmers Exchanges continue to grow GWP

    Key highlights Farmers Exchanges1 continue to grow GWP, with strong underlying result supporting surplus ratio above target range GWP (USDm) Combined ratio (%)2 Surplus ratio (%) +4% 28,371 FY-24 27,351 7% 17% 42.4% 9% 34-38% 6% 15% Target range 6% 95% 99% 94% 90% 80% 82% FY-23 FY-24 H1-22 H2-22 H1-

  15. Slide 15: CFO update

    @ ZURICH CFO update 18 © Zurich

  16. Slide 16: A diversified business delivering sustainable growth

    Group – Business operating profit A diversified business delivering sustainable growth at highly attractive levels of profitability BOP by region (USDm) BOP by business (USDm) +6% +6% In local currencies In local currencies +5% +5% 7,751 7,751 7,381 580 7,381 586 586 565 2,286 2,296 2,286 2,296 2,23

  17. Slide 17: Commentary

    Group – Business operating profit Commentary • Group business operating profit (BOP) was at a record level of • By business, P&C BOP increased 8% on a reported basis and in USD 7.8bn, with 6% growth in local currencies. local currencies compared with the prior year period driven by a strong performa

  18. Slide 18: NIAS was USD 5.8bn

    Group – Net income attributable to shareholders NIAS was USD 5.8bn, with favorable mark-to-market performance of assets partially offset by capital losses and other BOP to NIAS walk (USDm) Net impact of capital gains / losses (USDbn)1 25.1% 398 Effective tax rate 114 619 -277 -318 -2,082 Mark-to-mar

  19. Slide 19: Commentary

    Group – Net income attributable to shareholders Commentary • Net impact of capital gains / losses was USD 0.4bn favorable for • Restructuring costs were USD 0.3bn for the full year and in-line the full year, with positive mark-to-market performance of assets1 with guidance provided at the Investor U

  20. Slide 20: Highest credit ratings within European insurance industry

    Group – Ratings Highest credit ratings within European insurance industry after 2024 upgrades Financial Strength Ratings SST ratio (%)2 300% Rating Agency Rating / Outlook Last upgrade 267% 252% 234% 216% 221% 222% 212% 204% AA / Stable March 2021 200% 182% ≥160% Aa2 / Stable September 2024 100% ICR

  21. Slide 21: Durable growth at attractive levels of return

    Group – 2025 Outlook Durable growth at attractive levels of return • Insurance revenue expected to grow by mid-single digit percentage year-on-year Property & Casualty • Unchanged guidance for PYD (1-2%), losses from natural catastrophes (2.5-3.0%), and projected insurance finance expenses (+USD 0.2

  22. Slide 22: Strong growth supported by favorable rate environment

    P&C – Top-line Strong growth supported by favorable rate environment FY-24 top-line development GWP like-for-like growth Insurance revenue Insurance revenue GWP (USDm) Rate change (%)2 Rate change outlook (%)1 (USDm) like-for-like growth (%)1 EMEA 19,615 8% 4% Stable 18,651 8% North America 21,584 0

  23. Slide 23: Commentary

    P&C – Top-line Commentary • Gross written premiums rose 5% on a like-for-like basis and in • In North America, gross written premiums remained stable on a U.S. dollar terms. Growth was supported by higher premium rates like-for-like basis. Growth benefited from rate increases of 5% but of 4% on a Gr

  24. Slide 24: P&C BOP up 8% driven by EMEA

    P&C – BOP components P&C BOP up 8% driven by a strong performance in EMEA, compensating higher catastrophe losses in North America BOP by segment (USDm) BOP by component (USDm) +8% +8% In local currencies In local currencies +8% 4,204 4,204 3,893 223 3,893 181 343 290 315 10 -14 2,313 3,186 3,500 2,

  25. Slide 25: Commentary

    P&C – BOP components Commentary • P&C BOP was USD 4,204m, 8% higher than in the previous year. • The impact of fee result, other result, policyholder tax and non- In local currency, the P&C BOP was also 8% higher than in the controlling interests decreased USD 14m compared to the prior previous year

  26. Slide 26: P&C Commercial and Retail with improved underlying profitability

    P&C – Combined ratio by segment and customer unit P&C Commercial and Retail both with improved underlying profitability AY combined ratio (CR) excl. catastrophes by region (%) AY CR excl. catastrophes by customer unit (%)1 +0.1ppts -0.4ppts -1.5ppts -0.3ppts -0.7ppts -0.5ppts 96.2% 96.3% 95.4% 95.0%

  27. Slide 27: Commentary

    P&C – Combined ratio by segment and customer unit Commentary • In EMEA, the accident year combined ratio ex-catastrophes was • In Latin America, the accident year combined ratio ex- broadly stable compared to prior year with lower non-cat losses catastrophes improved 1.5 percentage points compared t

  28. Slide 28: Combined ratio improvement driven by attritional loss ratio

    P&C – Combined ratio details Combined ratio improvement driven by improved attritional loss ratio, partially offset by higher mix-driven commissions P&C combined ratio walk (%) 94.5% 94.2% -0.6% 0.0% 0.0% 0.4% 0.1% 0.0% 0.0% FY-23 Undiscounted Cat Discount PYD Commissions Premium tax Other insurance

  29. Slide 29: Commentary

    P&C – Combined ratio details Commentary • P&C combined ratio of 94.2% decreased by 0.2 percentage • Prior year development of 1.6% was well within the indicated 1-2% points compared to the prior year period as a 0.6 percentage range. All regions experienced favorable development in 2024. point decre

  30. Slide 30: P&C investment result benefits from higher reinvestment yields

    P&C – Investment result P&C investment result benefits from higher reinvestment yields, partially offset by a higher unwind of discount Investment result in BOP (USDm) Investment income yield of Group investments (%)1 +1% 3.5% 3.8% 1,539 1,529 269 FY-23 FY-24 225 Book yield2 3.2% 3.6% 2,503 Reinvest

  31. Slide 31: Commentary

    P&C – Investment result Commentary • Net investment result increased 1% compared to the previous • The book yield for debt securities rose to 3.6% while reinvestment year as higher investment income and realized capital gains rates on debt securities remained stable at 5.0%. outpaced the increase of

  32. Slide 32: Life gross premiums up 4% in local currencies

    Life – Gross premiums Life gross premiums1 up 4% in local currencies, with capital light growth driven by protection and unit-linked Gross premiums by line of business (USDbn)1 Gross premiums by region (USDbn)1,2 +4% 32.2 33.1 +5% +3% 20.9 20.9 21.7 20.0 +7% +7% -12% +4% 8.3 8.7 8.0 8.0 +17% 3.9 3.5

  33. Slide 33: Commentary

    Life – Gross premiums Commentary • In FY-24, Life gross premiums grew 4% on a like-for-like basis • Gross premiums were up year-on-year in all regions. In EMEA, 3% compared to the prior year, driven by our preferred lines unit- growth on a like-for-like basis benefited from strong growth of linked a

  34. Slide 34: New business CSM grows by 5%

    Life - New business and revenues New business CSM grows by 5% driven by protection and unit-linked CSM generating businesses1 Businesses without CSM1 PVNBP (USDm)2 Like-for-like NB CSM (USDm)2 Like-for-like Revenues (USDm) Like-for-like change (%)3 change (%)3 change (%)3 Short term protection: Prot

  35. Slide 35: Commentary

    Life - New business and revenues Commentary • In FY-24 the Group continued to grow Life new business, driven • Insurance revenues for short term life insurance, which is mainly by protection and unit-linked. Long term insurance contracts related to the protection business in Latin America, grew 7% o

  36. Slide 36: CSM 1% above prior year

    Life – Contractual service margin CSM 1% above prior year; 8% increase in local currencies CSM walk (USDm) FY-24 line of business split (USDm) 1,094 11,657 1,094 1,504 904 7% 11,526 260 11,657 22% 20% -1,504 -623 28% Of which expected return1 of ~USD 600m 26% 45% Underlying CSM accretion2 ~USD 200m

  37. Slide 37: Commentary

    Life – Contractual service margin Commentary • The Contractual Service Margin (CSM) of the Life business • Amortization into the P&L reduced CSM by USD 1,504m. This increased 1% in FY-24 on a reported basis, with 8% growth in local reflects a CSM amortization rate broadly in line with FY-23 and curr

  38. Slide 38: Record high level of Life BOP

    Life – Business operating profit Record high level of Life BOP, all drivers contribute to growth; strong increase in EMEA including non-recurring impacts BOP by driver (USDm) BOP by region (USDm) Δ Y-o-Y Δ Y-o-Y (USDm, %) (USDm, %) Long-term insurance: 1,683 +60 (+4%) EMEA 1,575 +307 (+24%) Profit r

  39. Slide 39: Commentary

    Life – Business operating profit Commentary • In FY-24 the Life business generated BOP of USD 2,235m, an all- • In EMEA, BOP grew 24% year on year, driven by strong time high, driven by underlying growth and favorable experience. performance of fee businesses, primarily in Ireland and Switzerland, a

  40. Slide 40: Farmers Management Services overview

    Farmers Management Services – Overview Growth in Farmers Exchanges1 premiums drives higher FMS income, with MGEP margin at 7.0% Business operating profit (USDm) MGEP margin (%)2 0.0ppts +5% 7.0% 7.0% 2,074 1,970 33 28 1,942 2,041 FY-23 FY-24 FY-23 FY-24 Fee result Net investment income and other 1 F

  41. Slide 41: Commentary

    Farmers Management Services – Overview Commentary • Farmers Management Services (FMS) BOP increased 5% compared to the prior year, with Fee result driven by the higher gross earned premium base of the Farmers Exchanges1 (up 4.9% compared to FY-23), lower operating expenses and the BOP contribution f

  42. Slide 42: Farmers Re and Farmers Life overview

    Farmers Re and Farmers Life – Overview Farmers Re benefits from improved underwriting result; Farmers Life reflects reinsurance transaction completed in 2023 Farmers Re BOP (USDm) Farmers Life BOP (USDm) -189 +74 209 192 139 117 20 11 89 65 -19 -56 FY-23 FY-24 FY-23 FY-24 CSM amortization Net invest

  43. Slide 43: Commentary

    Farmers Life and Farmers Re – Overview Commentary • Farmers Re BOP of USD 192m is USD 74m above prior year due to a lower combined ratio at a higher reinsurance participation percentage of 10.0%, compared to 8.5% in the prior year, and higher interest income. Effective December 31, 2024, the Farmers

  44. Slide 44: Group Functions and Non-Core Businesses BOP

    Group Functions and Operations & Non-Core Businesses – BOP Group Functions reported higher expenses; Non-Core Businesses losses from proactive actions on run-off portfolios Group Functions and Operations BOP (USDm) Non-Core Businesses BOP (USDm) -38 -314 -354 -104 -29 -20 -486 -496 -830 -870 FY-23 F

  45. Slide 45: Commentary

    Group Functions and Operations & Non-Core Businesses – BOP Commentary • Group Functions and Operations reported net expenses of USD 870m compared to USD 830m in the prior-year period. The increased expenses in Headquarters unit driven by growth initiatives. • The Group’s Non-Core Businesses, which c

  46. Slide 46: Very strong capital position with SST ratio at 252%

    Group – Solvency Very strong capital position with SST ratio at 252% 34% -24% 252% 234% 15% -12% 5% +7% FX SST ratio (%)1 +5% Interest rates, RE +4% Equity markets +0% Credit spreads FY-23 Assumption and Management Market Economic profit / Capital actions2 FY-24e model changes actions and other busi

  47. Slide 47: Commentary

    Group – Solvency Commentary • As of FY-24e, the Swiss Solvency Test (SST) ratio based on • FY-24e SST ratio was 28ppts higher than the Q3-24 SST ratio the Group's Internal Model as approved by the Swiss Financial of 224%. The improvement was driven by favorable market Market Supervisory Authority (F

  48. Slide 48: Shareholders' equity increases as strong NIAS covers dividend and buyback

    Group – Balance sheet and capital structure Shareholders’ equity increases as strong NIAS covers dividend and share buyback Shareholders’ equity (USDm)1 Capital structure (%)2 10% 8% +2% 5,814 16% 17% 41 4% 4% 24,860 444 25,472 -4,156 -442 19% 19% -1,090 51% 52% FY-23 NIAS Dividend Currency Net Trea

  49. Slide 49: Commentary

    Group – Balance sheet and capital structure Commentary • Shareholders’ equity increased by USD 0.6bn compared to year • As a result, the proportion of debt in the IFRS based capital end 2023. This was driven by strong NIAS of USD 5.8bn, which structure decreased to 24.8% compared to 26.5% in FY-23.

  50. Slide 50: 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

  51. Slide 51: Appendix

    Appendix 51 © Zurich

  52. Slide 52: Earnings per share performance against targets

    EPS Earnings per share performance against targets 2023-2025 cycle: Adjusted EPS (USD)1 2025-2027 cycle: Core EPS (USD) 2023-2025 2025-2027 Target 8% Target >9% 51.9 +15% CAGR +8% CAGR 42.2 40.4 40.1 38.5 2.0 37.8 34.2 32.1 8.8 40.2 29.7 FY-22 baseline3 FY-23 FY-24 FY-25 FY-222 FY-23 FY-24 FY-27 Adj

  53. Slide 53: Dividend policy

    Group – Dividend policy We are focused on continuing to reward our shareholders Dividend policy1 Dividend per share (CHF) NIAS2 payout ratio of ~75% 28 26 24 22 20 20 19 Dividend increases based on sustainable 17 18 earnings growth Minimum target of prior year level FY-16 FY-17 FY-18 FY-19 FY-20 FY-

  54. Slide 54: Update on customer satisfaction and brand consideration

    Customer KPIs Update on customer satisfaction and brand consideration tNPS1 FY-24 vs. FY-23 Brand consideration ranking4 13% 13% 13% Global2 +3.8pts 21% 20% 20% 27% 21% 33% 33% EMEA +2.8pts 33% 40% Asia Pacific +6.6pts 60% 57% 53% 53% 47% Latin America +3.8 pts 40% Farmers Exchanges3 -10.0 pts 2019

  55. Slide 55: Reinsurance program protecting our balance sheet

    P&C – Reinsurance program Reinsurance program protecting our balance sheet Group catastrophe reinsurance protection (USDm) Main additional treaties Global property per risk 115 400 400 Global surety excess of loss 400 1,200 1,200 U.S. liability quota share 1,200 600 405 600 300 442 200 Europe all pe

  56. Slide 56: Life new business and top-line growth

    Life – New business and top-line Strong new business and top-line growth driven by protection and unit-linked Long term insurance1 Short term insurance1 +5% +5% +21% +7% Like-for-like2 Like-for-like2 Like-for-like2 2,804 2,311 +3% +5% Insurance revenue (USDm) 16,384 16,891 1,094 1,037 331 679 20 6 F

  57. Slide 57: Farmers Exchanges GWP, PIF and Surplus

    Farmers Exchanges1 – GWP, PIF and Surplus Pricing actions impact premiums favourably; organic surplus generation from strong underwriting results Gross written premiums (USDbn) Policies-in-force (m) Surplus (USDbn, %) +2% 42.4% -8% 12.2 12.5 13.9 8.0 12.8 33.6% +4% 6.0 8.2 8.5 +11% +2% 3.7 4.1 3.2 3

  58. Slide 58: Strong cash remittances from all business segments

    Group - Cash remittances Strong cash remittances from all business segments Normalized cash remittances in % of NIAS Cash remittances (USDbn) ~95% 7.1 ~90% ~85% ~75% 3.4 4.6 4.8 0.1 1.4 1.6 0.9 1.7 0.9 3.2 3.3 3.2 -0.1 0.0 -0.9 -1.0 -1.1 P&C Life Farmers Total FY-22 FY-23 FY-24 Property & Casualty F

  59. Slide 59: SST ratio well in excess of the 160% floor

    Group – Solvency Very strong capital position, SST ratio well in excess of the 160% floor Group Swiss Solvency Test (%)1 Q3-24 SST sensitivities impact (ppts)2 300% 267% 252% Interest rate +50bps +14ppts 234% 216% 221% 222% 204% 212% Interest rate -50bps -15ppts 200% 182% Equities +20% +7ppts ≥160%

  60. Slide 60: Well diversified capital base by business segment

    Group – SST Components Well diversified capital base by business segment FY-24 Available Financial Resources (USDbn) FY-24 Risk Capital Split (%)2 2% Market risk Shareholders’ equity 25.5 6% 7% 4% Premium and reserve risk Dividend Accrual -4.4 Business risk Share buyback accrual 0.0 54% Natural cata

  61. Slide 61: 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 13.7 12.9 2.6 Average debt 2.3 0.3 FY-23 FY-24 cost (%) 1.9 0.6 8.6 Subordinated 3.9% 4.1% 0.2 1.7 8.9 Senior 1.8% 1.8% 0.7 1.2 1.1 2.3 Total 3.1% 3.2% 0.4 1.8

  62. Slide 62: Well diversified and high-quality investment portfolio

    Group – Investment portfolio Well diversified and high-quality investment portfolio FY-24 Group investments (%)1 FY-24 asset quality (%) FY-24 non-financial credit (%) USD 55bn USD 68bn 6% 4% Other 3% 0% 0% 4% 4% 3% 8% 18% 15% 5% Consumer non-cyclical 8% 34% 4% 30% 7% Utility 2% USD 6% USD Consumer

  63. Slide 63: High-quality credit and private debt exposure

    Group – Investment portfolio Well diversified and high-quality credit and private debt exposure FY-24 rating of credit and private debt securities (%) USD 21.7bn USD 18.0bn USD 11.7bn USD 5.6bn USD 3.4bn USD 8.0bn 2% 3% 1% 12% 11% 7% 5% 28% 34% 16% 30% 48% 35% 55% 85% 53% 69% 13% 33% 3% 9% 18% 21% 6

  64. Slide 64: Calculation of like-for-like growth

    Alternative performance measures Calculation of like-for-like growth Like-for-like growth FY-23 (USDm) FY-24 (USDm) Like-for-like Business KPI Rep M&A/Other1 Adj Rep FX M&A/Other1 Adj1 (%) P&C GWP 44,401 (398) 44,003 46,624 291 (897) 46,018 5% P&C Insurance revenue 42,293 (326) 41,967 44,792 251 (89

  65. Slide 65: Other information

    Other information 65 © Zurich

  66. Slide 66: For further information

    For further information Call us Visit or follow us Investor Relations and Rating Agency Management • Mitchell Todd +41 76 340 71 55 • Francesco Bonsante +41 44 628 00 68 • Samuel Han +41 44 625 32 57 • Johannes Herholdt +41 44 625 25 53 Investor Relations website • Michèle Matlock +41 79 740 39 30 F

  67. Slide 67: Thank you

    Thank you Upcoming events • March 6, 2025 – Annual Report 2024 • March 31, 2025 – P&C reserve disclosure 2024 • April 9, 2025 – Annual General Meeting 2025 • May 8, 2025 – Update for the three months ended March 31, 2025 • August 7, 2025 – Half year results 2025 • November 6, 2025 – Update for the n

Zurich Insurance Group — FY2024 Earnings Presentation on 6ix