Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — FY2018 Earnings Presentation
75 slides from Zurich Insurance's earnings presentation, Feb 7, 2019
Slide 1: Annual results 2018 – Well positioned for the next phase
Annual results 2018 – Well positioned for the next phase Investor presentation February 7, 2019 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 financial targets Group results and outlook P&C catastrophe reinsurance program Property & Casualty (P&C) Farmers Exchanges Life Group solvency Farmers Gro
Slide 3: Well positioned for the next phase and well on track to fully deliver on 2017 to 2019 targets
KEY HIGHLIGHTS Well positioned for the next phase and well on track to fully deliver on 2017 to 2019 targets Strong performance with BOP up 20% in a challenging market and claims Group environment; BOPAT ROE of 12.1% Excellent performance with BOP up 23% driven by portfolio growth and reduced Life e
Slide 4: Key businesses strengthened while exiting non-core activities; customer focus improved
KEY HIGHLIGHTS Key businesses strengthened while exiting non-core activities; Customer focus improved with tangible results CUSTOMER FOCUS YIELDING POSITIVE RESULTS IN RETAIL Leading position to be achieved in the attractive Indonesian market NPS Retention New customers3 (FY-18 vs. FY-17, ppts) (FY-
Slide 5: With Cover-More we are building a great platform for future growth in travel insurance
KEY HIGHLIGHTS With Cover-More we are building a great platform for future growth in travel insurance and assistance TOP 3 GLOBAL PLAYER IN TRAVEL INSURANCE AND MEDICAL ASSISTANCE SERVICES GROSS SALES (USDm) CUSTOMER COUNT (millions) 836 18 Expanded footprint 374 6 FY-16 FY-19 FY-16 FY-18 pro-forma1
Slide 6: Consistent progress against key strategic priorities
KEY HIGHLIGHTS – FARMERS EXCHANGES1 Consistent progress against key strategic priorities EASTERN EXPANSION AGENCY MODEL 100% Established state GWP (USDm)2 Capitalized agents Eastern expansion state 50% (% of new appointments) ME Eastern expansion state + +33% VT 0% Commercial rideshare NH MA 2013 20
Slide 7: Continued strong performance across all businesses
KEY HIGHLIGHTS Continued strong performance across all businesses P&C LIFE FARMERS EXCHANGES1 COMBINED RATIO (%) BOP GROWTH (%) COMBINED RATIO (CR) (%) 101.6% 99.9% 100.9% 97.8% +23% 7.3% 6.9% 5.8% 4.0% 31.8% 32.4% 94.3% 93.0% 64.7% 63.6% -1.4% -2.3% FY-17 FY-18 FY-17 FY-18 FY-17 FY-18 Cat ER AY LR
Slide 8: Delivering on our 2017-2019 targets
KEY HIGHLIGHTS Delivering on our 2017-2019 targets BOPAT ROE (%) Z-ECM RATIO (%) CUMULATIVE CASH REMITTANCES 13.2% (USDbn) 12.1% adj1 125% 120% >9.5 adj1 7.5 12.1% >12.0% 9.2% 100% 3.8 3.7 FY-17 FY-18 Target FY-18e2 Target range FY-17 & FY-18 2017 - 2019 Target CUMULATIVE NET EXPENSE SAVINGS (USDm)
Slide 9: Good underlying progress with Group BOP up 5% excluding exceptional items
KEY HIGHLIGHTS Good underlying progress with Group BOP up 5% excluding exceptional items UNDERLYING BOP DEVELOPMENT (USDm) +5% 5,017 4,762 4,566 264 143 115 187 3,803 700 2,344 2,500 2,085 1,546 1,258 1,380 1,573 1,554 1,691 1,691 1,643 1,643 39 39 37 37 -731 -693 -735 -753 FY-17 Hurricanes HIM Char
Slide 10: FY-18 CFO update
@ ZURICH FY-18 CFO update
Slide 11: Strong performance with Group BOP up 20% in a challenging claims and financial market environment
GROUP – BOP Strong performance with Group BOP up 20% in a challenging claims and financial market environment BOP BY REGION (USDm) BOP BY BUSINESS (USDm) +20% +20% 4,566 4,566 37 460 3,803 3,803 271 39 1,643 473 287 1,643 1,691 1,691 1,554 1,130 1,258 798 1,861 2,085 1,546 1,089 -536 -800 -731 -753
Slide 12: 24% increase in net income attributable to shareholders
GROUP – NIAS 24% increase in net income attributable to shareholders driven by higher BOP and lower effective tax rate BOP TO NIAS WALK (USDm) 24.9% Tax rate -350 +24% 720 -38 vs. FY-17 395 -1,317 261 4,566 3,716 FY-18 BOP Realized capital gains Restructuring costs1 Other Income taxes attributable F
Slide 13: USD 1.1bn of expense savings delivered to date
GROUP – EXPENSE DEVELOPMENT USD 1.1bn of expense savings delivered to date EXPENSE DEVELOPMENT (USDbn) BREAKDOWN OF EXPENSE BASE AND SAVINGS (%) 10.3 10.2 USD 10.3bn USD 1.1bn USD 0.4bn -0.1 0.3 9.4 -1.1 11% 0.1 19% ~20% ~25% 59% 44% ~55% 31% 37% 2015 FX & 2015 M&A Savings Other 2018 FY-15 FY-18 Res
Slide 14: 2019 outlook
GROUP – OUTLOOK 2019 outlook NEP expected to be broadly stable P&C Combined ratio expected to be around the upper end of the indicated 95-96% range Investment income excluding gains expected to be broadly stable versus the prior year Life BOP expected to be at a similar level to the reported
Slide 15: Stable topline and continued positive rate trend
P&C – TOPLINE Stable topline and continued positive rate trend FY-18 TOPLINE DEVELOPMENT RATE CHANGE (%)1 NORTH AMERICA RATE CHANGE (%)1 GWP Like-for-like FY-18 Expected trend (USDm) GWP growth (%)2 3.8% 3.8% EMEA 14,600 1% 2% Stable 3.5% 2.7% North 14,716 -3% 3% Slightly moderating America 1.6% APA
Slide 16: Improved underlying underwriting result, positive investment income
P&C – BOP COMPONENTS Improved underlying underwriting result, positive investment income; lower hedge fund and FX gains BOP BREAK DOWN (USDm) BOP CHANGE BY SEGMENT (USDm) COMBINED RATIO (%) +35% -3.1ppts 2,085 -69 -36 100.9% 299 -246 2,085 97.8% 1,546 574 592 31.8% 32.4% 191 1,546 1,847 1,932 69.1%
Slide 17: Improvement in accident year loss ratio ex-cat drives improved combined ratio
P&C – COMBINED RATIO DETAILS Improvement in accident year loss ratio ex-cat drives improved combined ratio; OUE ratio improves 2ppts from 2015 baseline AY LOSS RATIO EXCLUDING OTHER UNDERWRITING EXPENSE COMMISSION RATIO (%)2 CATASTROPHES (%)1 (OUE) RATIO (%)2 +1.0ppts 68.2% 16.9% 16.1% 15.9% 65.7% -
Slide 18: Underlying improvements in EMEA primarily in commercial business
P&C – COMBINED RATIO BY SEGMENT AND CUSTOMER UNIT Underlying improvements in EMEA primarily in commercial business AY COMBINED RATIO (CR) EXCLUDING CATASTROPHES BY SEGMENT (%)1 AY CR EXCL. CATASTROPHES BY CUSTOMER UNIT (%)1 +1.6ppts -1.3ppts +0.7ppts -1.3ppts +0.2ppts 0.0ppts 100.8% 99.5% 97.0% 97.9
Slide 19: Higher new money yields leading to stabilization of investment yield
P&C – INVESTMENT RESULT Higher new money yields leading to stabilization of investment yield INVESTMENT RESULT IN BOP (USDm) INVESTMENT INCOME YIELD INVESTMENT INCOME YIELD OF GROUP INVESTMENTS (%)1 2,038 1,884 2.7% 2.8% 191 FY-17 FY-18 1,847 1,932 INVESTMENT INCOME & REINVESTMENT YIELD OF DEBT SECU
Slide 20: Strong Life performance across all metrics
LIFE – OVERVIEW Strong Life performance across all metrics BOP (USDm) APE (USDm)1 NBM (%) & NBV (USDm)1 +24% +11% like-for-like2 like-for-like2 19.4% 23.3% 24.1% +23% -5% 1,554 4,868 4,686 4,639 +1% 319 like-for-like2 1,258 1,117 1,130 1,231 1,437 195 -2% 296 186 224 249 31 62 155 999 231 981 76 132
Slide 21: Continued attractive product mix
LIFE – PRODUCT MIX Continued attractive product mix; 86% of APE and 100% of NBV from protection and capital efficient products APE PRODUCT MIX (USDm)1 NBV PRODUCT MIX (USDm)1 4,868 999 4,686 4,639 981 26 519 82 82 831 640 782 685 90 167 164 664 726 34 714 97 522 1,277 1,252 1,024 86% 736 737 615 1,6
Slide 22: Continued strong net inflows; lower AUM balances
LIFE – NET INFLOWS AND ASSETS UNDER MANAGEMENT Continued strong net inflows; lower AUM balances driven by FX and market movements NET INFLOWS BY SEGMENT (USDbn) AUM DEVELOPMENT (USDbn) -4% -6% 7.7 270 7.4 7 -10 254 -13 44 2.4 44 2.4 0.1 0.0 0.4 111 1.9 106 4.5 3.4 116 105 FY-17 FY-18 Balance as of N
Slide 23: Growth in BOP driven by improved technical margins
LIFE – BOP BY SOURCE Growth in BOP driven by improved technical margins BOP BY SOURCE OF EARNINGS (USDm) KEY DRIVERS FY-18 vs. FY-17 Actual LC Loadings & fees 2,608 870 3,479 1% 2% Revenues from loadings & fees 90% and technical margins Inv. margin 537 -17% -12% Technical margin 1,181 19% 20% Unit-l
Slide 24: Higher investment income from growth in asset base
LIFE – INVESTMENT RESULT Higher investment income from growth in asset base; reduced gap between new money and investment yields INVESTMENT RESULT IN BOP GROSS OF PH (USDm)1 INVESTMENT INCOME YIELD INVESTMENT INCOME YIELD OF GROUP INVESTMENTS (%)2 3,574 3,373 2.9% 2.9% 649 338 FY-17 FY-18 2,925 3,03
Slide 25: Growth across all continuing operations at Farmers Exchanges
FARMERS EXCHANGES1 – GROWTH Growth across all continuing operations at Farmers Exchanges GWP GROWTH (%) GWP GROWTH BY BUSINESS LINE (%) 6.1%4 3.1% Auto 4.8% 3.7% FY-18 2.4% 3.8% Home 1.0% 3.3% 3.0% 5.0% 2.6% Specialty 3.0% 2.0% 1.7% 8.4%4 Business Insurance 0.3% 0.9% 2.1% Total3 1.0% Q1-18 Q2-18 Q3-
Slide 26: Continued progress in customer KPIs
FARMERS EXCHANGES1 – GROWTH DRIVERS Continued progress in customer KPIs NET PROMOTER SCORE2 AND RETENTION (%)3 NEW BUSINESS COUNT – YTD CHANGE (%)4 46.1 5.8% 45.3 45.6 4.9% 3.6% 44.6 2.6% 43.1 43.3 42.7 42.6 83.1% 82.7% 82.5% 82.2% 81.9% 81.9% -11.3% -13.7% 81.5% 81.4% -16.8% -19.3% Q1-17 Q2-17 Q3-1
Slide 27: Continued underlying improvement in Farmers Exchanges combined ratio
FARMERS EXCHANGES1 – PROFITABILITY Continued underlying improvement in Farmers Exchanges combined ratio COMBINED RATIO (%)2 SURPLUS3 38.7% 39.4% 103.9% 101.6% 99.9% 7.1% 7.3% 6.9% 5.5 5.5 96.8% 94.3% 93.0% FY-16 FY-17 FY-18 FY-17 FY-18e Catastrophe losses CR (excl. catastrophe losses) Surplus ratio
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 1,415 1,424 7.0% 7.0% FY-17 FY-18 FY-17 FY-18 © Zurich 1 Margin on gross earned premiums of the Farmers Exchanges. Regarding Farmers Exchanges see footnote 2 on slide 3. February 7, 2019 An
Slide 29: Lower BOP at Farmers Re and Farmers Life
FARMERS LIFE AND FARMERS RE – OVERVIEW Lower BOP at Farmers Re and Farmers Life driven by reduced quota share participation and actuarial assumption updates BOP (USDm) FARMERS LIFE APE & NBV (USDm) FARMERS RE COMBINED RATIO (%)1 APE 277 100.1% 99.1% 91 84 6.2% 4.4% 219 220 176 NBV 93.9% 94.7% 113 10
Slide 30: Headquarter expense reduction of 10% more than offset by lower recharges
GROUP FUNCTIONS AND OPERATIONS & NON-CORE BUSINESSES – BOP Headquarter expense reduction of 10% more than offset by lower recharges to business units GROUP FUNCTIONS AND OPERATIONS BOP (USDm) NON-CORE BUSINESSES BOP (USDm) 39 37 -281 -310 -450 -443 -731 -753 FY-17 FY-18 FY-17 FY-18 Headquarters (HQ)
Slide 31: Very strong capital position supported by operating capital generation
GROUP – SOLVENCY RATIOS Very strong capital position supported by operating capital generation pre-dividend Z-ECM AND SST RATIO (%)1 Z-ECM RATIO DEVELOPMENT (%) 240% -2% 0% 217% 216% -5% 220% 204% 13% 200% 196% 185% 189% 132% -9% 180% -4% 125% 160% 140% 132% 127% 125% 125% 122% 121% 120% 114% 100% F
Slide 32: Reduction in shareholders’ equity driven by lower unrealized gains
GROUP – BALANCE SHEET AND CAPITAL STRUCTURE Reduction in shareholders’ equity driven by lower unrealized gains SHAREHOLDERS’ EQUITY (USDm) CAPITAL STRUCTURE (%)1 -8% -925 9% 12% 3,716 16% -2,805 16% 32,993 -3,730 -914 -2,475 30,189 599 75% 72% FY-17 NIAS Dividend Currency Net URG/L Pension FY-18 FY-
Slide 33: Continued strong cash remittance, dividend proposal of CHF 19
GROUP – CASH REMITTANCES AND DIVIDEND Continued strong cash remittance, dividend proposal of CHF 19 NET CASH REMITTANCES (USDbn) DIVIDEND PER SHARE (CHF) 3.7 3.8 +6% 2.8 1.5 19 2.5 18 17 17 17 17 17 17 17 2.0 16 1.5 1.1 0.4 1.4 1.1 1.2 11 0.1 0.2 -0.8 -0.9 -0.8 -0.2 FY-16 FY-17 FY-18 FY-08 FY-09 FY-
Slide 34: 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 35: Appendix
@ ZURICH Appendix
Slide 36: 2017-2019 Financial targets
GROUP – FINANCIAL TARGETS 2017-2019 Financial targets BOPAT ROE1 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 Business
Slide 37: We are focused on continuing to reward our shareholders
GROUP – DIVIDEND POLICY We are focused on continuing to reward our shareholders, ~76% NIAS payout ratio proposed for 2018 dividend ZURICH’S DIVIDEND POLICY DIVIDEND PER SHARE (CHF) +6% NIAS payout ratio of approximately 75% 19 18 17 17 17 17 17 17 17 16 11 Dividend increases based on sustainable ear
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) 200 250 200 105 200 750 200 1,000 1,000 200 350 1,000 250 447 250 250 300 7503 487 600 600 200 Europe US US Rest of World all perils Global aggregate cat treaty all peri
Slide 39: Farmers Exchanges – GWP, PIF/VIF and combined ratio by line
FARMERS EXCHANGES1 – GWP, PIF/VIF AND COMBINED RATIO BY LINE Top-line growth across all continuing operations, combined ratio improvement driven by Auto GWP (USDm) PIF/VIF (000’s)2 COMBINED RATIO (%) +2% -2% 20,325 17,929 19,908 17,638 103.7% 125 245 454 Auto 435 220 409 193 406 507 48 100.4% 1,998
Slide 40: Well diversified capital base by risk type
GROUP – Z-ECM COMPONENTS Well diversified capital base by risk type AFR COMPOSITION (USDbn)1 RBC SPLIT (%)1 11% Market risk Shareholders equity 30.2 Reinsurance credit risk 6% 3% 44% Premium and reserving risk 7% Natural catastrophe risk Dividend accrual -2.8 Life insurance risk 24% Operational risk
Slide 41: 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-18 135% Actual value as of FY-17 216% Interest rate +100 bps 141% Interest rate +100 bps 223% Interest rate -100 bps 122% Interest rate -100 bps 195% USD appreciation +
Slide 42: 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 12.0 10.8 2.2 2.0 5.2 0.2 3.8 0.6 1.8 1.6 Average debt 2017 2018 1.5 cost (%) 0.5 0.8 Senior 1.3% 1.4% 1.1 1.0 1.9 6.9 0.7 1.6 6.8 Subordinated 5.1% 4.9% 0.3 1.1 1.0 0.3
Slide 43: Commentary
@ ZURICH Commentary
Slide 44: Page 3: Key messages
COMMENTARY Page 3: Key messages Full year 2018 results show very strong performance in a challenging market and claims environment, with the business operating profit (BOP) up 20% on a headline basis. The results position the Group to deliver fully on the targets for the 2017 to 2019 plan period, wi
Slide 45: Page 4: Key highlights – Strategic update
COMMENTARY Page 4: Key highlights – Strategic update 2018 saw the Group continue to make strong progress on key strategic priorities. The Group further strengthened its positioning in the faster growing regions of Southeast Asia and Latin America as well as the fast growing global travel and assista
Slide 46: Page 5: Key highlights – Cover-More
COMMENTARY Page 5: Key highlights – Cover-More During the year, the Group continued to drive development of Cover-More, the group’s global travel and assistance business. Bolt on acquisitions in Ireland and Latin America, further strengthened Cover-More’s footprint while Zurich’s other travel busine
Slide 47: Page 6: Key highlights – Farmers
COMMENTARY Page 6: Key highlights – Farmers Farmers Exchanges are making consistent progress against all the key strategic priorities outlined at the 2017 Investor Day. The expansion into the eastern U.S. continues to deliver strong growth, with gross written premiums exceeding USD 1bn in 2018. The
Slide 48: Page 7: Key highlights – Proof points by business
COMMENTARY Page 7: Key highlights – Proof points by business The 2018 results show a range of financial proof points against key management goals, including: Property & Casualty (P&C) gross written premiums increased 1% in headline terms and was stable on a like-for-like basis. The combined ratio im
Slide 49: Page 8: Key highlights – Status on financial targets
COMMENTARY Page 8: Key highlights – Status on financial targets 2018 continued to build on the positive performance of 2017 with the Group making further progress in terms of profitability across the businesses and remaining on track to meet the financial targets set out in November 2016. In terms o
Slide 50: Page 9: Key highlights – Underlying BOP development
COMMENTARY Page 9: Key highlights – Underlying BOP development During 2018 the Group’s operating results were distorted by a number of major one off impacts, with the most notable being the high level of natural catastrophe events as well as charges related to the Group’s restructuring recognized wi
Slide 51: Page 11: Group – BOP
COMMENTARY Page 11: Group – BOP Overall BOP growth was 20% on a reported basis. Growth in EMEA was driven by a combination of strong performance in both Life and P&C. The performance in Life was driven by continued growth in the business as well as the absence of the impact of the change to UK index
Slide 52: Page 12: Group – NIAS
COMMENTARY Page 12: Group – NIAS Net income attributable to shareholders (NIAS) increased 24% in the year, with growth driven primarily by the increase in BOP together with a reduced tax rate to 24.9%. Below the operating line, net realized capital gains of USD 720m, with half stemming from properti
Slide 53: Page 13: Group – Expense development
COMMENTARY Page 13: Group – Expense development The FY-18 result includes additional expense savings of USD 400m, with the cumulative total achieved to date equating to USD 1.1bn. These savings include Farmers and take into account FX and the impact of acquisitions and disposals completed over 2016-
Slide 54: Page 14: Group – Outlook
COMMENTARY Page 14: Group – Outlook Over 2019 the Group expects to continue to progress against the targets laid out in December 2016. Property & Casualty: The Group continues to take specific actions to adjust the portfolio mix, with these expected to offset underlying growth to leave overall net e
Slide 55: Page 15: P&C – Top line
COMMENTARY Page 15: P&C – Top line Gross written premiums in Property & Casualty (P&C) for the full year of 2018 rose 1% in U.S. dollars and were flat in local currency and adjusting for the acquisitions which were closed during the second half of the year. Growth in Asia Pacific and Latin America w
Slide 56: Page 16: P&C – BOP Components
COMMENTARY Page 16: P&C – BOP Components P&C BOP on a reported basis for FY-18 was USD 2,085m, 35% higher than in the previous year. The underwriting result increased strongly by USD 805m with the previous year’s result impacted by the hurricanes Harvey, Irma and Maria in North America. In line with
Slide 57: Page 17: P&C – Combined ratio details
COMMENTARY Page 17: P&C – Combined ratio details The accident year loss ratio excluding catastrophes improved by 1.1 percentage points compared to FY-17, driven by improved underwriting. Catastrophe losses for the full year totaled 4.0%, 1.8 percentage points below the previous year but still above
Slide 58: Page 18: P&C – Combined ratio by segment and customer unit
COMMENTARY Page 18: P&C – Combined ratio by segment and customer unit The EMEA accident year combined ratio ex-catastrophes of 95.7% was lower than in the previous year, with underlying improvements in the loss ratio. In North America the accident year combined ratio ex-catastrophes was 94.3% and re
Slide 59: Page 19: P&C – Investment result
COMMENTARY Page 19: P&C – Investment result The FY-18 investment result of USD 1,884m included unfavorable fair value movements of USD 48m, mainly from the Group’s hedge fund portfolio. Investment income rose 5% on a reported basis and 8% in local currency, while fair value items showed a decline of
Slide 60: Page 20: Life – Overview
COMMENTARY Page 20: Life – Overview On a headline basis, Life BOP increased by 23% to USD 1,554m. Charges related to the Group’s restructuring recognized in BOP were USD 20m within this figure. In EMEA, BOP increased by 22% in U.S. dollars and 17% in local currencies, with most countries contributin
Slide 61: Page 21: Life – Product mix
COMMENTARY Page 21: Life – Product mix Protection business sales increased by 17% and were the largest contributor to APE growth. The Group continues to focus on protection, unit-linked and corporate pension business, with these products accounting for 86% of APE sales. Compared to FY-17, this repre
Slide 62: Page 22: Life – Net inflows & AuM
COMMENTARY Page 22: Life – Net inflows & AuM Net inflows decreased by 4% compared to the prior year. The decrease was primarily driven by the absence of a single large additional contribution to an existing corporate protection scheme in North America. Assets under management decreased by 6% due to
Slide 63: Page 23: Life – BOP by source
COMMENTARY Page 23: Life – BOP by source The Group’s life business continued to be driven by stable revenue streams, with 90% of life revenues coming from loadings and fees together with technical margins. Viewed by margin and beginning with revenues, loadings and fees increased by 1%. Growth in the
Slide 64: Page 24: Life – Investment result
COMMENTARY Page 24: Life – Investment result Life investment result, which is gross of policyholder sharing, decreased by 6% to USD 3.4bn in U.S. dollars, driven mainly by adverse market developments in Q4-18. Reinvestment yields for debt securities were around 2.4%. This represents an improvement c
Slide 65: Page 25: Farmers Exchanges – Growth
COMMENTARY Page 25: Farmers Exchanges – Growth The Farmers Exchanges showed continued growth in top-line through 2018. Gross written premiums for continuing operations increased by 3.7% compared to prior year, with growth coming in all lines of business and driven by a combination of rate increases,
Slide 66: Page 26: Farmers Exchanges – Growth drivers
COMMENTARY Page 26: Farmers Exchanges – Growth drivers Key customer metrics continued to improve as a result of the Farmers Exchanges customer focused strategy. Net Promoter Score, an indicator of customer satisfaction and loyalty, reached a record high of 46.1% for the full year resulting in a furt
Slide 67: Page 27: Farmers Exchanges – Profitability
COMMENTARY Page 27: Farmers Exchanges – Profitability The Farmers Exchanges combined ratio improved by 1.7 points to 99.9%. This improvement underlines the effectiveness of underwriting actions taken in the business in recent years. The effectiveness of the Farmers Exchanges reinsurance programs was
Slide 68: Page 28: FMS – Overview
COMMENTARY Page 28: FMS – Overview Farmers Management Services (FMS) BOP was broadly stable compared to the prior year, with growth in the gross management result driven by higher gross earned premiums at Farmers Exchanges offsetting USD 23m of unfavorable mark to market impacts on a deferred compen
Slide 69: Page 29: Farmers Life and Farmers Re – Overview
COMMENTARY Page 29: Farmers Life and Farmers Re – Overview Farmers Re BOP was USD 14m lower than in the prior year, as a consequence of the announced reduction in the all lines quota share participation from 8% to 1%, effective December 31, 2017. The combined ratio was 1ppt lower driven by improved
Slide 70: 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 & Operations increased by USD 22m to USD 753m. Continued reduction in gross headquarter expenses, 10% lower than in the prior year, was more than offset by lower
Slide 71: Page 31: Group – Solvency ratios
COMMENTARY Page 31: Group – Solvency ratios The Group’s Z-ECM ratio remained very strong at 125% as of the end of December. Strong operational capital generation from the businesses added 13 percentage points. Negative market movements in the latter part of the year reduced the ratio by 5 points, la
Slide 72: Page 32: Group – Balance sheet and capital structure
COMMENTARY Page 32: Group – Balance sheet and capital structure Shareholders’ equity decreased by USD 2.8bn over the year due mainly to a decline in unrealized gains and losses and F/X movements, with net income of USD 3.7bn offset by the similar level of capital returned to shareholders through div
Slide 73: Page 33: Group – Cash remittances & dividend proposal
COMMENTARY Page 33: Group – Cash remittances & dividend proposal During the year the Group saw net remittances of USD 3.8bn, in-line with the prior year and 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
Slide 74: 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 Investor Relations website Events Fin
Slide 75: Calendar
CALENDAR: March 19-20, 2019, Morgan Stanley European Financials Conference, London April 1-2, 2019, HSBC West Coast Conference, San Francisco April 3, 2019, Annual General Meeting May 9, 2019, Update for the three months ended March 31, 2019 August 8, 2019, Half year results 2019 © Zurich
Zurich Insurance Group — FY2018 Earnings Presentation on 6ix