Zurich Insurance Group Ltd · SIX:ZURN
Zurich Insurance — Zurich Financial Services — BNP Paribas Conference 2004
25 slides from Zurich Insurance's conference presentation, May 27, 2004
Slide 1: BNP Paribas Conference 2004
BNP Paribas Conference 2004 “Developing New Growth Models” Patrick O’Sullivan Group Finance Director Paris, May 27, 2004
Slide 2: 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. Forward-looking statements include statements regarding our strategic dire
Slide 3: Agenda
Agenda • Introduction and Overview • Global Corporate Customers • Europe Personal & Business Customers • US Personal Customers • Q&A © Zurich Financial Services - May 27, 2004 3
Slide 4: Introduction
@ ZURICH FINANCIAL SERVICES Introduction
Slide 5: We have delivered on our commitments
We have delivered on our commitments Our commitments What we delivered Operational • Additional earnings of USD • Exceeded USD 1bn target improvement 1bn in 2003 through expense • Nearly doubled operating ROE reduction, improved pricing, and reduced combined ratio underwriting and claims management
Slide 6: Financial highlights FY 2003
Financial highlights FY 2003 in USD millions 2003 2002 Change Total GWP and policy fees 48,919 41,423 18% Business operating profit 2,265 1,175 93% Net income 2,120 -3,362 nm IFRS ROE 12.5% 0.6% 11.9 pts Business operating profit ROE 9.3% 5.1% 4.2 pts Combined ratio 97.9% 111.4% 13.5 pts Embedded va
Slide 7: Financial highlights Q1 2004
Financial highlights Q1 2004 in USD millions Q1 2004 Q1 2003 Change Gross written premiums and policy fees 14,307 13,493 6% Business operating profit 942 779 21% Net income 702 134 424% ROE, annualized 16.2% 12.9%1 3.3 pts Business operating profit ROE, annualized 14.8% 10.1%1 4.7 pts General Insura
Slide 8: Essentials of our future direction
Essentials of our future direction • Customer focus • Global presence • Value maximizing growth • Performance culture and financial strength © Zurich Financial Services - May 27, 2004 8
Slide 9: Market Segments
Market Segments Corporate Center USA Europe International Life Insurance Global Corporate Customers US Personal Customers Europe Personal & Business US Small Business Customers International Businesses US Other Commercial © Zurich Financial Services - May 27, 2004 9
Slide 10: Global Corporate Customers
@ ZURICH FINANCIAL SERVICES Global Corporate Customers
Slide 11: A leading competitor in our chosen markets
A leading competitor in our chosen markets 2003 GWP: USD 7 billion Primary geographies served1 Primary products offered1 We are #1 or #2 WC, incl. A&H 2.3 in our core markets Property 1.9 US Cont. Europe 3.4 2.2 Liability 1.8 UK 1.4 Fleet 0.6 We offer a broad range of products but are Other2 0.4 uni
Slide 12: A unique value proposition
A unique value proposition For customers and brokers we offer • Long term commitment to this segment, backed by strength and stability • Long term relationships built on in-depth customer knowledge • Distinctive expertise in selected industries • Ease of doing business • Meaningful capacity • Broad
Slide 13: Network distinctive services
Network distinctive services • Skilled underwriters - innovative solutions • Superior and customized claims handling – 8,000 claims professionals world-wide • Expert cash management across multi-national programs • 800 Risk Engineering professionals in 32 local venues integrated in our network • Glo
Slide 14: Europe Personal and Business Customers
Europe Personal and Business Customers
Slide 15: Focus on growth for profit in key markets
Focus on growth for profit in key markets Zurich‘s European presence in Personal and Business Customer segment1 Key markets Other markets 1 There is a market presence in the Corporate segment in Nordic, France, Benelux and our Pan-European network © Zurich Financial Services - May 27, 2004 15
Slide 16: Performance and growth opportunities
Performance and growth opportunities Priority 1. Performance 2. Growth Goals Top-tier technical performance Growth for profit • In all markets • Transform agent & broker channels • Across the cycle • Excel as a multi-channel player Operational Operational excellence Distribution transformation imper
Slide 17: Competitive advantage in operations
Competitive advantage in operations Competitive Build on Advantage • Very profitable segment Expand as • Rules-based motor as • Strong innovation history a leading underwriting expertise innovation - Worksite marketing player in • Agent segmentation platform for standardized strategy - Significant d
Slide 18: Competitive advantage in distribution
Competitive advantage in distribution 2002 agent channel share (in %) in key Continental Europe markets Switzerland 85.1 Agents drive profitability due to: • Long term contracts Italy 86 • High retention rates • Relationship-driven approach Spain 73.4 Germany 66 Agents as a key element of Zurich’s m
Slide 19: Key value drivers for profitable growth
Key value drivers for profitable growth Operational • Underwriting excellence excellence • Claims excellence • Leverage agents value Distribution • Manage brokers for profit transformation • Expand multi channel approach Europe • Align processes, procedures and set standards consolidation • Drive im
Slide 20: US Personal Customers
@ ZURICH FINANCIAL SERVICES US Personal Customers
Slide 21: Farmers Exchanges overview
Farmers Exchanges overview in USD millions GWP1 NEP1 Share2 Rank2 Auto 7,625 7,599 5.3% #4 Property 3,444 3,234 6.8% #3 Personal Specialty 1,087 951 13.9% #1 Total Personal lines 12,156 11,784 6.0% #3 Commercial 1,031 922 2.9% #9 Total (incl. other) 13,833 13,294 3.6% #3 10% 120% 8% Combined Ratio 1
Slide 22: Performance and structure
Performance and structure Farmers Exchanges1 Farmers Management Services Combined ratio vs. Industry Operating income (in USD millions) 120 1'000 Industry 115 950 110 Farmers1 900 105 850 100 800 95 Farmers 750 adjusted2 90 700 1998 1999 2000 2001 2002 2003 1998 1999 2000 2001 2002 2003 1 Managed bu
Slide 23: Transforming the business
Transforming the business 1999 2000-2002 2002-2004 2004+ Review Change Stabilize Grow Underwriting & Pricing Claims Agency Development • Reallocate Capital • Help Point • University of Farmers • Exited Med Mal • Senior Claims Team • DARG • Grew Specialty • Re-engineered • State by state focus • Redu
Slide 24: Summary
Summary Continue improvement program to strengthen surplus by USD 1 billion Drive premium Sustainable model growth by growing to provide reliable and improving and consistent • Exclusive agents earnings growth • Independent agents and superior ROEs • Customer retention Management company earnings ca
Slide 25: Zurich Financial Services
@ ZURICH FINANCIAL SERVICES
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