Zurich's profit falls in 2020 despite lift from commercial insurance

Zurich Insurance Group's profits declined 8 percent year-on-year due to losses stemming from the COVID-19 pandemic and higher catastrophe claims, despite witnessing strong growth in its commercial insurance business. The CEO, however, is confident that the group is well-positioned to benefit from the improved pricing momentum in 2021.

The Swiss insurer reported a decline in profit for the full year 2020, with the first half impacted by COVID-19 and a return to growth in the second half.

Net profit plummeted to $3.8 billion, down 8 percent compared with the prior year when it generated $4.15 billion.

Its commercial insurance gross written premiums, which make up around two-thirds of the group’s P&C premiums, grew by 7 percent in 2020, primarily driven by significant rate increases in North America and Europe, Middle East and Africa (EMEA), as well as by improved customer retention.

Property & casualty claims related to COVID-19, net of reinsurance and related reductions in claim frequency, were $450 million for the full year. Overall COVID-19 impact on the group including life and other business was $852 million.

Zurich said its P&C results demonstrate a strong underlying performance with growth in gross written premiums and higher pricing. It achieved price increases of about 8 percent overall, with commercial premiums rates up 17 percent in North America.

The P&C gross written premiums grew 4 percent - from $34.18 billion in 2019 to $35.5 billion in 2020, but its combined ratio deteriorated 2 percentage points higher year-on-year to 98.4 percent in 2020, compared with 96.4 percent in 2019. Zurich said this was entirely driven by the impact of COVID-19 and the higher level of catastrophes.

Zurich's group chief executive officer Mario Greco said: "I am proud of the way we acted in 2020 and the results we achieved, and looking ahead I’m confident in the strength of our business, our strategy and our employees to deliver on our goals."

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