Zurich Insurance 1st Half Operating Profit Jumps Above Views, to Launch CHF1.8 Billion Share Buyback -- Update
August 11 2022 - 3:29AM
Dow Jones News
By Ed Frankl
Zurich Insurance Group AG said Thursday that first-half
operating profit jumped, beating expectations as it dealt with
turbulent markets, and said it would launch a large share
buyback.
The Swiss insurer's business operating profit rose 25% to $3.39
billion in the six months to the end of June, its highest since
2008, driven by an underlying improvement across all businesses,
Zurich said.
However, net profit of $2.20 billion was below expectations,
according to analysts' estimates provided by the company, even as
it climbed slightly from $2.19 billion in the same period last
year.
The figures compare with expectations of BOP of $3.28 billion
and net profit of $2.48 billion.
The company also said it would launch a special share-buyback
program of around 1.8 billion Swiss franc ($1.91 billion) to offset
dilution from the June sale of its German life back book.
The program is expected to start in the coming months, subject
to market conditions and regulatory approvals, it added.
The improvement in BOP was largely offset by adverse effects
from financial markets, hitting the net profit figure, it said.
The strength of the U.S. dollar versus other currencies was also
a headwind, Zurich said.
Meanwhile, natural-catastrophe claims were above expected
levels, though lower than the previous year, while Covid-19 impacts
continue to decline.
BOP at its property & casualty segment was up 32%, with a
record-low combined ratio--which measures profitability--of 91.9%,
driven by an improvement in underwriting profitability with higher
prices feeding into the results, the company said.
Zurich's life segment BOP rose 13%, it added.
Its solvency ratio--a measure of an insurer's financial
strength--was 262%, up 51 percentage points over the first half and
well above Zurich's target for a ratio above 160%.
The company also said it added than 850,000 net new retail
customers added in first half.
Zurich's Chief Executive Mario Greco said the company was on
track to beat all its targets for the second successive three-year
cycle, adding that its transformation into a leaner and more agile
business steered it through the "difficult conditions of the past
three years."
Write to Ed Frankl at edward.frankl@dowjones.com
(END) Dow Jones Newswires
August 11, 2022 03:14 ET (07:14 GMT)
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