Shares of Zurich Insurance Company increase with first 6 months profits, share buybacks According to Reuters
© Reuters. FILE PHOTO: The logo of Zurich Insurance is seen at a former office building in Zurich, Switzerland on November 11, 2021. REUTERS/Arnd Wiegmann
By Maria Sheahan and Carolyn Cohn
BERLIN/LONDON (Reuters) – Zurich Insurance Group (OTC:) reported a 25% increase in operating profit for the first half of the year on the back of strong overall performance and a share announcement. Bumper notes 1.8 billion Swiss francs ($1.91 billion) bought back on Thursday, sending its shares higher.
Europe’s fifth-largest insurer says it is on track to meet all of its targets by 2022.
The fact that Zurich has been able to exceed its financial goals in three years despite the COVID-19 pandemic and the war in Ukraine “gives us great confidence that we can handle the unexpected, yet was and still is,” Chief Executive Officer Mario Greco told Reuters.
The insurer will set new three-year targets later this year, with more challenges. Some may focus on different metrics, Greco said.
Operating profit came in at $3.39 billion, with both the real estate and casualty and life businesses performing better.
Analysts saw an average operating profit of $3.28 billion, according to a consensus forecast compiled by the company.
Insurers are facing weak investment performance due to the market slump caused by the war in Ukraine and inflationary pressures hitting customers’ wallets.
However, rising premiums have helped the commercial insurance division.
Zurich’s property and casualty business posted a first-half combined ratio – a measure of underwriting profitability where less than 100% indicates profitability – of 91.9%, a record high. continent, thanks to higher prices and lower weather and disaster requirements.
Greco says P&C premium rates are up 9% while inflation is at 5-6%.
Rival Allianz (ETR:) earnings last week missed forecasts, although AXA did better than expected, boosted by health insurance sales.
Zurich said the share buyback, which will begin in the coming months, will make up for the expected diluted earnings from the sale of the agreed German stock book.
Greco said the acquisition would not affect Zurich’s dividend policy.
Shares in Zurich were up 1.9% at 0914 GMT, compared with a 0.6% gain in European insurance shares. Barclays (LON:)’ analysts described the results as “strong”, reiterating their “overweight” rating.
(1 dollar = 0.9445 Swiss francs)
(Additional reporting by Paul Arnold in Zurich, edited by Kirsti Knolle & Simon Cameron-Moore)
