Zurich's 'solid' Q1 performance weighed down by COVID-19 P&C claims
Zurich Insurance Group’s property & casualty (P&C) operations benefitted from favourable pricing and growth in Europe, Middle East and Africa (EMEA) and North America, but COVID-19 related claims charge weighed down the "solid start to the year", according to chief financial officer George Quinn.
The Swiss insurer reported a $280 million COVID-19 related charge in its P&C business in the first quarter of 2020, and expects it to reach approximately $750 million for the full year as per the group’s scenario analysis.
Overall, the company expects COVID-19 related claims in 2020 to remain within its "earnings risk tolerance", but noted that this is "subject to significant uncertainty" given the nature of the pandemic.
Zurich also stated that developments in financial markets and ongoing weaker economic activity are also expected to have an "adverse impact on both the group’s revenues and earnings through the remainder of the year", adding that the precise magnitude of which will depend on the ultimate levels of financial markets over the year and the extent and duration of the economic downturn.
The gross written premiums in P&C segment for the first three months rose 7 percent to $9.68 billion from $9.18 billion in the first quarter of 2019. Growth came primarily from Europe, Middle East and Africa (EMEA) and North America, and was further supported by higher premium rates in most regions.
The company's life new business annual premium equivalent decreased 10 percent to $958 million from $1.18 billion in Q1 2019.
The insurer highlighted that its capital position and liquidity "remains strong", as well as its "conservative investment portfolio".
Zurich's group CFO Quinn said: “The Group reported a solid start to the year with P&C growth and pricing remaining favorable, a steady performance from Farmers, while life performed well against a very strong first quarter in 2019. The impact of claims related to the COVID-19 outbreak and the sharp falls in financial markets in the latter part of the first quarter are expected to remain a 2020 earnings event. Group solvency remains strong and together with the diversity of our business and our conservative balance sheet, I am confident that the Group is well placed to manage the current challenges.”
Zurich’s group chief executive officer Mario Greco said: “Throughout this crisis our priority has been to support our customers and local communities, while ensuring the safety and wellbeing of our colleagues. We acted in a socially responsible way by closing our offices early to work remotely, keeping our business fully operational. In this environment, our investments in the digitalization of our business are paying off.
"We have responded to the heightened need for remote and flexible services by creating or expanding our digital offering for individual and business customers alike. We expect the crisis to strengthen demand for digital interactions and better tailored services and are committed to the expansion of our digital offering as this trend gathers pace. Our flexible and resilient business model positions the Group well to quickly adapt to changing situations and requirements to deliver continued success.”
Already registered?
Login to your account
If you don't have a login or your access has expired, you will need to purchase a subscription to gain access to this article, including all our online content.
For more information on individual annual subscriptions for full paid access and corporate subscription options please contact us.
To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.
For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk
Editor's picks
Editor's picks
More articles
Copyright © intelligentinsurer.com 2024 | Headless Content Management with Blaze