Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — Q1 2017 Earnings Presentation
72 slides from Zurich Insurance's earnings presentation, May 11, 2017
Slide 1: Update for the three months ended March 31, 2017
Update for the three months ended March 31, 2017 Investor and media presentation May 11, 2017 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 P&C reserve disclosure 2016 Group BOP and NIAS Group restatement impact Property & Casualty (P&C) P&C catastrophe reinsurance program Life Farmers Exchanges Farm
Slide 3: Key messages
KEY HIGHLIGHTS Key messages Strong performance with underlying1 BOP up 14% Group More favorable macro background benefiting investment income On track to deliver against 2017-2019 strategic targets P&C 2ppt improvement in accident year loss ratio ex-catastrophes Lowered absolute expenses L
Slide 4: 2017-2019 Financial targets
KEY HIGHLIGHTS 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 Operating
Slide 5: On track to achieve our financial targets
KEY HIGHLIGHTS On track to achieve our financial targets BOPAT ROE (%)1 Z-ECM RATIO (%) CUMULATIVE CASH REMITTANCES (USDbn) 12.6% 129% 9.5 Ex. Ogden 120% >12.0% 9.5% 100% on track Q1-17 Target Q1-17e2 Target range Q1-17 2017 - 2019 Target CUMULATIVE NET EXPENSE SAVINGS (USDbn) ~USD 0.4bn as of Q1-17
Slide 6: Continued delivery across all businesses
KEY HIGHLIGHTS Continued delivery across all businesses P&C LIFE FARMERS EXCHANGES1 97.2% COMBINED RATIO (%) Ex. Ogden BOP GROWTH IN LOCAL CURRENCY (USDm) GWP CONTINUING OPERATIONS (USDm)2 98.1% 100.7% 2.6% 2.0% +4% +23% 31.7% 33.5% 4,827 4,651 65.7% 64.0% -1.8% 1.1% Q1-16 Q1-17 Q1-16 Q1-17 FY-16 Q1
Slide 7: We are confident in our reserving approach and reserve strength
KEY HIGHLIGHTS We are confident in our reserving approach and reserve strength Reserve Favorable prior year development (PYD) of 1.8% seen in 2016 Strength Prior year Stable reserve run-off of 1-2% expected going forward development Workers Workers Compensation tail factors have historically been at
Slide 8: Strong start to year with Group BOP up 14% excluding Ogden
KEY HIGHLIGHTS Strong start to year with Group BOP up 14% excluding Ogden BOP (USDm) Q1-17 OGDEN IMPACT (USDm) +14% 1,218 289 1,067 928 630 209 556 420 312 312 254 390 396 396 20 35 80 -153 -156 -156 -45 Q1-16 Q1-17 Q1-17 Reported Ex. Ogden P&C Life Farmers Group Functions and Operations NCB © Zuric
Slide 9: Q1-17 CFO update
@ ZURICH Q1-17 CFO update
Slide 10: BOP excluding Ogden is strong with all businesses contributing
GROUP – BOP AND NIAS BOP excluding Ogden is strong with all businesses contributing BOP (USDm) BOP TO NIAS WALK (USDm) 1,218m +14% Ex. Ogden 67 -91 1,067 92 -16 928 -314 556 420 60 254 312 928 32.0% tax rate 607 390 396 20 -153 -156 -45 Q1-17 RCG1 Restructuring Other Shareholder Q1-17 BOP costs2 tax
Slide 11: Stable and positive rates, volumes driven by profitability measures
P&C – TOPLINE Stable and positive rates, volumes driven by profitability measures TOPLINE DEVELOPMENT RATE CHANGE (%)1 Q1-17 GWP (USDm) Q1-17 GWP Growth in local currency (%) Q1-17 DEVELOPMENT EMEA 4,884 -4% 2% Stable North America 3,266 3% 1% Slightly declining APAC 547 4% 1% Stable Latin America 6
Slide 12: Increased BOP excluding Ogden
P&C – BOP COMPONENTS Increased BOP excluding Ogden BOP BREAK DOWN (USDm) KEY DRIVERS (USDm) USD 630m +13% Ex. Ogden -26 556 556 109 -9 -209 420 298 420 72 226 301 72 17 51 66 -36 -91 Q1-16 UW result Investment Other Ogden Q1-17 result Q1-16 Q1-17 EMEA North America APAC Latin America GRe BOP UW resu
Slide 13: AY loss ratio continuing to improve
P&C – COMBINED RATIO DETAILS AY loss ratio continuing to improve COMBINED RATIO (%) LOSS RATIO (%) 97.2% Ex. Ogden 103.6% 98.1% 100.7% 63.7% 97.3% 71.8% Ex. Ogden 31.7% 3.5% 31.7% 31.4% 33.5% 66.4% 65.9% 67.2% 2.6% 1.1% 2.0% 68.2% 66.5% 71.8% 66.4% 67.2% 64.0% 65.9% 65.7% 0.1% 1.1% -1.8% -1.7% FY-15
Slide 14: Absolute expenses reducing, ratios distorted by earned premium effect
P&C – EXPENSE RATIO DETAILS Absolute expenses reducing, ratios distorted by earned premium effect EXPENSE RATIO (%) EXPENSE RATIO OUTLOOK Commissions 33.1% 33.5% 32.1% 31.4% 30.3% Development subject to mix 14.7% 13.9% 14.9% 15.4% 16.0% Should be seen in conjunction with loss ratio development 1
Slide 15: Ex-Ogden CR improvements visible across businesses, more work needed in commercial insurance
P&C – COMBINED RATIO BY BUSINESS AND CUSTOMER UNIT Ex-Ogden CR improvements visible across businesses, more work needed in commercial insurance COMBINED RATIO (CR) BY SEGMENT (%)1 CR BY CUSTOMER UNIT (%)1 94.3% Catastrophes CR (excl. catastrophes) Ex. Ogden 102.8% Ex. Ogden 102.0% 90.9% 95.2% 1.4% E
Slide 16: Higher investment result, slowing decline in investment income
P&C – INVESTMENT INCOME Higher investment result, slowing decline in investment income INVESTMENT RESULT IN BOP (USDm) INVESTMENT INCOME YIELD INVESTMENT INCOME YIELD OF GROUP INVESTMENTS (%)1,3 505 2.5% 2.5% 396 56 Q1-16 Q1-17 459 449 INVESTMENT INCOME & REINVESTMENT YIELD OF DEBT SECURITIES (%)2,3
Slide 17: Higher new business value due to improved business mix and volumes
LIFE – NEW BUSINESS AND NET INFLOWS Higher new business value due to improved business mix and volumes APE (USDm)1 NBM & NBV1 PRODUCT VIEW +12% NBM (%) APE 11% 1,172 25.5% 27.0% 36% 1,049 25% 299 215 16 42 20 34 NBV (USDm) +18% 28% 277 235 40 NBV -3% 23 39 12% 780 815 24 7 10 14% 181 187 77% Q1-16 Q
Slide 18: AUM growth of 4% driven by positive net flows and markets
LIFE – NET INFLOWS AND ASSETS UNDER MANAGEMENT AUM growth of 4% driven by positive net flows and markets NET INFLOWS BY SEGMENT (USDbn) AUM DEVELOPMENT (USDbn) 2.2 259 249 4 2 5 38 0.5 36 1.7 0.1 0.0 0.6 99 101 0.1 0.0 1.6 1.0 114 120 Q1-16 Q1-17 Balance as of Net inflows Market FX Balance as of Jan
Slide 19: Increase in technical margin drives BOP growth
LIFE – BOP BY SEGMENT AND SOURCE Increase in technical margin drives BOP growth BOP BY SEGMENT (USDm) BOP BY SOURCE OF EARNINGS (USDm) D Q1-16 Reported LC +23% Loadings & fees 649 184 833 3% 6% 312 1 1 19 Inv. margin 98 254 72 -30% -31% 0 35 0 3 54 Technical margin 237 31% 31% 39 4 Operating costs -
Slide 20: Returns related to asset growth offset by lower yields, mainly in EMEA
LIFE – INVESTMENT INCOME Returns related to asset growth offset by lower yields, mainly in EMEA INVESTMENT RESULT IN BOP GROSS OF PH (USDm)1 INVESTMENT INCOME YIELD INVESTMENT INCOME YIELD OF GROUP INVESTMENTS (%)2,3 839 809 2.9% 2.8% 74 147 Q1-16 Q1-17 735 692 INVESTMENT INCOME & REINVESTMENT YIELD
Slide 21: 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 (%) 5.5% 5.5% 5.5% 5.9% Auto 6.5% 0.9% Home 3.8% 3.8% 3.9% 3.8% 7.5% 3.6% 2.3% Specialty 3.2% 2.1% 1.2% 1.9% Business Insurance -0.1% -43.4% Discontinued3 -27.5% 1.9% Total 3.6% Q1-16 Q
Slide 22: Rate and underwriting actions impact new business
FARMERS EXCHANGES1 – GROWTH DRIVERS Rate and underwriting actions impact new business NET PROMOTER SCORE2 RETENTION (%)3 NEW BUSINESS (%)4 43.2 43.1 82.1% 81.4% -1.6% -18.5% FY-16 Q1-17 FY-16 Q1-17 FY-16 Q1-17 1 See footnote 1 on previous slide. 2 Survey based measure of customer loyalty for Farmers
Slide 23: Second consecutive year of high first quarter catastrophe losses
FARMERS EXCHANGES1 – PROFITABILITY Second consecutive year of high first quarter catastrophe losses COMBINED RATIO (%)2 SURPLUS3 104.4% 37.0% 37.3% 104.2% 8.6% 8.9% 5.5 5.4 95.6% 95.5% Q1-16 Q1-17 FY-16 Q1-17 Catastrophe losses CR (excl. catastrophe losses) Surplus ratio (%) Farmers Exchanges surplu
Slide 24: Improved gross management result at FMS offset by employee benefit-related charges
FARMERS MANAGEMENT SERVICES – OVERVIEW Improved gross management result at FMS offset by employee benefit-related charges BOP (USDm) MGEP MARGIN (%)1 347 348 7.0% 7.0% Q1-16 Q1-17 Q1-16 Q1-17 © Zurich 1 Margin on gross earned premiums of the Farmers Exchanges. Regarding Farmers Exchanges see footnot
Slide 25: Stable results at FNWL, continued high cat losses at Farmers Re
FNWL AND FARMERS RE – OVERVIEW Stable results at FNWL, continued high cat losses at Farmers Re BOP (USDm) FNWL APE & NBV (USDm) FARMERS RE CR (%)1 APE 43 48 23 22 105.8% 103.0% 8.9% 8.8% 45 47 NBV 96.9% 94.2% 23 20 3 -4 Q1-16 Q1-17 Q1-16 Q1-17 Q1-16 Q1-17 FNWL Farmers Re Catastrophes CR (excl. catas
Slide 26: Lower gross HQ costs offset by reduced business unit recharges, Non-core loss driven by Ogden
GROUP FUNCTIONS AND OPERATIONS & NON-CORE BUSINESSES – BOP Lower gross HQ costs offset by reduced business unit recharges, Non-core loss driven by Ogden impact GROUP FUNCTIONS AND OPERATIONS BOP (USDm) NON-CORE BUSINESSES BOP (USDm) USD 35m +74% Ex. Ogden 20 -24 -45 -129 -110 -153 -156 -45 Q1-16 Q1-
Slide 27: Capital position remains strong and above target range
GROUP – SOLVENCY RATIOS Capital position remains strong and above target range Z-ECM AND SST1 RATIO (%) Z-ECM2 RATIO DEVELOPMENT (INDICATIVE) 240% 227% 217% -2% 220% 3% 129% 196% 0% 0% 200% 189% 185% 180% 3% 125% 160% 140% 127% 129% 122% 125% 121% 120% 114% 100% FY-12 FY-13 FY-14 FY-15 FY-16 Q1-17e2
Slide 28: Decline in shareholders' equity due to dividend payment
GROUP – BALANCE SHEET AND CAPITAL STRUCTURE Decline in shareholders’ equity due to dividend payment SHAREHOLDERS’ EQUITY (USDm) CAPITAL STRUCTURE (%)1 30,660 9% 8% 19% 18% 29,325 -2,639 62 423 212 607 73% 73% FY-16 Dividend NIAS Net URG/L CTA Pension Q1-17 FY-16 Q1-17e1 plans & other Senior debt Hyb
Slide 29: 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 30: P&C reserve disclosure 2016
@ ZURICH P&C reserve disclosure 2016
Slide 31: P&C reserving triangle data have been refreshed for 2016
P&C – RESERVE DISCLOSURE P&C reserving triangle data have been refreshed for 2016 Reserve We are confident in our approach and the strength of our reserves strength Using the data Data can be used for high-level assessment, when accounting for data features Refreshed 10-year triangles have been upda
Slide 32: Data cover ~75% of gross P&C reserves
P&C – RESERVE DISCLOSURE Data cover ~75% of gross P&C reserves RECONCILIATION OF DISCLOSED RESERVES TO IFRS RESERVES, FY-16 (USDbn) 61.2 1.4 4.1 55.6 7.5 6.8 41.3 Gross non-life ULAE Non-Core Gross IFRS Other1 AYs 2006 Gross reserves in IFRS reserves Businesses reserves excl. & prior P&C disclosure
Slide 33: Care must be taken to adjust for features in the triangle data
P&C – RESERVE DISCLOSURE Care must be taken to adjust for features in the triangle data1 North America Claims system conversion distorts 2011 and prior diagonals auto & property Europe auto Experience of older years is not always a good indicator of future development Liability Chain ladder can over
Slide 34: North America workers compensation tails remain strong
P&C – RESERVE DISCLOSURE North America workers compensation tails remain strong 10-TO-ULTIMATE IMPLIED PAID (LHS) AND INCURRED (RHS) LOSS DEVELOPMENT FACTORS1 1.7 1.7 1.6 1.6 1.5 1.5 1.4 1.4 1.3 1.3 1.2 1.2 1.1 1.1 1.0 1.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010 2011 20
Slide 35: North America workers compensation AY booking is robust relative to peers
P&C – RESERVE DISCLOSURE North America workers compensation AY booking is robust relative to peers WORKERS COMPENSATION BREAKDOWN OF NET AY LR EX ULAE 17% 17% 17% 19% 18% 23% 30% 47% Zurich 57% 71% North America 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 10% 12% 13% 14% 17% 23% 28% 36% 46% 65
Slide 36: Reduction in asbestos reserves due to FX and loss payments
NON-LIFE - RESERVE DISCLOSURE Reduction in asbestos reserves due to FX and loss payments GROSS ASBESTOS RESERVES (USDm) 3-YEAR SURVIVAL RATIOS (%)2 +1% -19% 2,712 13.1 132 368 2,209 125 12.9 315 2,211 1,769 FY-15 FY-16 FY-15 FY-16 Other1 US UK © Zurich 1 Includes Germany, Australia and Ireland. 2 To
Slide 37: Appendix
@ ZURICH Appendix
Slide 38: Restated BOP reflects new Group structure
GROUP – RESTATEMENT IMPACT Restated BOP reflects new Group structure with impact from other BOP changes not material, NIAS is unchanged BOP BY BUSINESS (USDm) 4,530 4,495 0 24 -22 2,435 2,437 0 0 -36 2,435 2,437 P&C -202 25 -37 1,344 1,130 Life Farmers 1,344 1,130 202 0 0 Group Functions and Operati
Slide 39: Reinsurance program inline with Group risk appetite
P&C – CATASTROPHE REINSURANCE1 Reinsurance program inline with Group risk appetite CATASTROPHE REINSURANCE TREATIES (USDm) 10 200 Combined global cat treaty2 105 US wind swap 10 200 10 200 750 10 200 Single global USD 200m treaty, which can be applied to any region2 Global cat treaty 750 750 350 Reg
Slide 40: 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)1 +1.9% -1.2% 4,938 18,689 18,458 4,848 1,927 2,081 8.0% 8,255 8,144 -1.3% -4.3% 269 257 0.6% 156 -2.8% 750 755 152 711 694 -2.4% 1,170 1,181 0.9% 4,835 4,814 -0.4% 598 61
Slide 41: Second consecutive year of high Q1 cat losses
FARMERS EXCHANGES1 – COMBINED RATIO Second consecutive year of high Q1 cat losses COMBINED RATIO BY BUSINESS LINE (%)1 110.0% 106.4% Auto Auto 110.5% 108.2% 100.1% 98.9% Bristol West2 Bristol West2 102.8% 106.1% 21st Century 110.4% 21st Century 102.7% CA/HI2 98.7% CA/HI2 107.1% 99.5% 108.9% Home 97.
Slide 42: Well diversified capital base by risk type
GROUP – Z-ECM COMPONENTS Well diversified capital base by risk type Q4-16 AFR1 COMPOSITION (USDbn) FY-16 RBC1 SPLIT (%) 10% Market risk Shareholders equity 31 6% 2% Re-ins credit risk 6% P&R risk2 Dividend accrual 3 49% Natural cat risk Life insurance risk 23% Net intangibles 18 Operational risk 3%
Slide 43: Solvency ratios resilient to market movements
GROUP – SOLVENCY RATIO SENSITIVITIES1 Solvency ratios resilient to market movements SOLVENCY RATIO IMPACT2 125% Actual value as of FY-16 227% 128% Interest rate +100 bps 233% 118% Interest rate -100 bps 207% 126% USD appreciation +10% 233% 127% Equities +20% 228% 123% Equities -20% 223% 107% Credit
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 (%) MATURITY PROFILE (USDbn)1 11.2 2.1 10.1 1.9 0.6 0.2 4.2 1.5 4.5 1.4 Average debt 1.3 2015 2016 cost (%) 0.5 1.2 0.1 Senior 2.0 1.3 0.9 0.8 1.8 0.7 1.5 7.1 0.5 5.6 Subordinated 5.7 5.5 0.2 1.0 1.0
Slide 45: Commentary
@ ZURICH Commentary
Slide 46: Page 3: Key messages
COMMENTARY Page 3: Key messages Q1-17 shows strong underlying performance with BOP up 14% adjusted for the impact of Ogden, with positive performance across all businesses and a good investment result. The Group remains on track to deliver on the strategic priorities outlined at the investor day in
Slide 47: Page 4: Key highlights – 2017-2019 financial targets
COMMENTARY Page 4: Key highlights – 2017-2019 financial targets Just as a reminder, the Group has four key targets for the 2017 to 2019 cycle. First, the Group targets a BOPAT ROE in excess of 12% over the 2017-2019 period. This assumes no major improvement in investment yields or the current pricin
Slide 48: Page 5: Key highlights – Status on financial targets
COMMENTARY Page 5: Key highlights – Status on financial targets The first quarter shows that the Group continues to make good progress in terms of profitability across the businesses and is on track to meet the financial targets set out at the November 2016 investor day. In terms of the four key fin
Slide 49: Page 6: Key highlights – Proof points by business
COMMENTARY Page 6: Key highlights – Proof points by business In P&C continued re-underwriting efforts have resulted in a 1.6ppt improvement in the accident year loss ratio ex-cat compared to FY-16. The expense ratio in Q1-17 is 2ppts higher than in Q1- 16 mainly driven by the higher commission ratio
Slide 50: Page 7: Key highlights – P&C reserves disclosure
COMMENTARY Page 7: Key highlights – P&C reserves disclosure The Group remains confident in the reserving approach, the Zurich Way of Reserving, and in the strength of the reserves. In 2016 overall prior year reserve development for the Group was favorable at 1.8ppts, in line with the communicated ex
Slide 51: Page 8: Key highlights – Ogden impact
COMMENTARY Page 8: Key highlights – Ogden impact At year end 2016 the Group reserves were set based on an assumed reduction in the UK Ogden rate from 2.5% to 1.0% for liability lines. Following the subsequent announcement by the UK Ministry of Justice on February 27 to reduce the rate to -0.75% the
Slide 52: Page 10: Group – BOP and NIAS
COMMENTARY Page 10: Group – BOP and NIAS Adjusting for the impact of Ogden overall BOP was up 14% against the prior year period with all businesses contributing to the good performance. The Q1-17 results have been presented based on the revised management structure as announced last year, with prior
Slide 53: Page 11: P&C – Topline
COMMENTARY Page 11: P&C – Topline Gross written premium (GWP) for the first three months was down 2% on a reported basis and flat in local currency. Adjusting for the RCIS acquisition in the US and the disposals of South Africa, Morocco and the Netherlands in 2016, overall premium growth was slightl
Slide 54: Page 12: P&C – BOP components
COMMENTARY Page 12: P&C – BOP components Excluding the impact of the change in the Ogden rate in the UK, P&C BOP for Q1-17 was USD 630m, 13% higher than in the first quarter of last year. This was driven by improvements in both EMEA and North America. APAC BOP was USD 56m lower in the quarter, mainl
Slide 55: Page 13: P&C – Combined ratio details
COMMENTARY Page 13: P&C – Combined ratio details Excluding the impact of Ogden the Group combined ratio for Q1-17 further improved to 97.2%, mainly due to a reduction in the loss ratio of 2.2ppts. The continued focus on underwriting and portfolio actions has lowered the current accident year loss ra
Slide 56: Page 14: P&C – Expense ratio details
COMMENTARY Page 14: P&C – Expense ratio details The expense ratio in Q1-17 was 33.5%, which is 2ppts higher than in Q1-16. The main driver was a higher commission ratio reflecting changes in the mix of business. The other underwriting expense ratio increased by 0.6ppts, where an absolute reduction i
Slide 57: Page 15: P&C – Combined ratio by business and customer unit
COMMENTARY Page 15: P&C – Combined ratio by business and customer unit Looking at the combined ratio by business and customer unit, reductions are visible across different businesses with some work needed in commercial insurance. The EMEA combined ratio for Q1-17 excluding the impact of Ogden was 94
Slide 58: Page 16: P&C – Investment income
COMMENTARY Page 16: P&C – Investment income The Q1-17 investment result includes an improvement in the hedge fund portfolio which generated net capital gains of USD 56m versus a USD 63m loss in the prior year. Investment income was down 2% on a reported basis and 1% in local currency compared to the
Slide 59: Page 17: Life – New business and net inflows
COMMENTARY Page 17: Life – New business and net inflows Q1-17 Life new business APE volumes increased 15% in local currency compared to the prior year quarter. This was primarily driven by Latin America, through strong growth in individual protection and unit-linked businesses in Brazil Santander, a
Slide 60: Page 18: Life – Net inflows and assets under management
COMMENTARY Page 18: Life – Net inflows and assets under management Net inflows were positive for the quarter, where sales of individual protection and unit linked business in Santander Brazil and corporate pension volumes in Switzerland and Ireland contributed. EMEA inflows decreased compared to the
Slide 61: Page 19: Life – BOP by Segment and Source
COMMENTARY Page 19: Life – BOP by Segment and Source Life BOP increased 23% both in local currency and US dollars compared to the prior year quarter, to USD 312m. In EMEA, local currency BOP earnings increased by 6%, but were flat USD, where a strong result in Zurich International Life offset slight
Slide 62: Page 20: Life – Investment income
COMMENTARY Page 20: Life – Investment income Despite higher assets under management in all regions, Life investment income, which is gross of policyholder sharing, decreased slightly to USD 692m. This was mainly driven by lower yields in EMEA. Reinvestment yields for debt securities were around 1.8%
Slide 63: Page 21: Farmers Exchanges – Growth
COMMENTARY Page 21: Farmers Exchanges – Growth The two major factors impacting Farmers Exchanges growth are unchanged: Strong rate increases in Auto on one hand, resulting in average premium per policy growing 9% year-on-year, and the accelerated run-off of the 21st Century Direct Auto book outside
Slide 64: Page 22: Farmers Exchanges – Growth drivers
COMMENTARY Page 22: Farmers Exchanges – Growth drivers Net Promoter Score and retention have remained broadly stable relative to full year 2016 levels and despite the significant rate and underwriting actions taken to restore the profitability of Auto. These actions have had an intended negative imp
Slide 65: Page 23: Farmers Exchanges – Profitability
COMMENTARY Page 23: Farmers Exchanges – Profitability The first quarter of 2017 has continued the high level of Q1 catastrophe losses and exceeded the already high level of Q1-16, with overall catastrophe losses once more surpassing USD 0.4bn. Similar to 2016, more than half of the losses were cause
Slide 66: Page 24: Farmers Management Services – Overview
COMMENTARY Page 24: Farmers Management Services – Overview The gross management result of FMS improved 2% to USD 343m largely due to higher management fees. This, however, was offset by unfavorable movements in the marked-to-market value of assets supporting employee benefit liabilities and some oth
Slide 67: Page 25: FNWL and Farmers Re – Overview
COMMENTARY Page 25: FNWL and Farmers Re – Overview Reflecting the recent change in Zurich’s organization FNWL is now shown as part of Farmers. Notably its life products are exclusively sold through the Farmers distribution channels. In FY-16 FNWL had favorable claims experience related to assumption
Slide 68: Page 26: Group Functions and Operations & Non-Core Businesses – BOP
COMMENTARY Page 26: Group Functions and Operations & Non-Core Businesses – BOP Group Functions BOP loss overall remained at a similar level as in the previous year. Within this the Headquarters BOP loss increased mainly due to lower recharges to the business units. Holding & Financing BOP loss impro
Slide 69: Page 27: Group – Solvency ratios
COMMENTARY Page 27: Group – Solvency ratios The 2016 Z-ECM ratio was 125%, slightly above the 122% original estimate but within the normal margin of error. Note that the 2016 Z-ECM ratio and the 2016 SST ratio both reflect the full impact of change in the Ogden discount rate in the UK. End March Z-E
Slide 70: Page 28: Group – Balance sheet and capital structure
COMMENTARY Page 28: Group – Balance sheet and capital structure Shareholders’ equity decreased USD 1.3bn to USD 29.3bn due to the payment of the 2016 dividend, only partially compensated by net income and movements in unrealized capital gains and foreign exchange. The overall Group capital structure
Slide 71: For further information
For further information CALL US VISIT OR FOLLOW US Investor Relations Richard Burden +41 44 628 96 40 Aaron Beharelle +41 44 625 25 50 André Meier +41 44 625 37 75 Gianni Vitale +41 44 625 48 26 Rating Agency Management Michèle Matlock +41 44 625 28 50 Investor Relations website Financial result
Slide 72: Calendar
CALENDAR: May 30, 2017, DB Global Financials Conference 2017, New York June 7, 2017, Goldman Sachs 21st Annual European Financial Conference, Madrid June 8, 2017, Vontobel Investor Summer Conference, Interlaken June 22, 2017, Autonomous, Insurance Rendezvous, London August 10, 2017, Half y
Zurich Insurance Group — Q1 2017 Earnings Presentation on 6ix