Zurich presented 2020 Annual and Sustainability Reports which outline the Group's activities during 2020: from supporting employees and customers, to laying foundations for future success by accelerating digitalization and sharpening focus on sustainability.
Gross written premiums in Property & Casualty (P&C) for 2020 increased 4 % in U.S. dollars and on a like-for-like basis, after adjusting for currency movements and closed acquisitions and disposals. Growth was supported by higher premium rates in commercial insurance, which accelerated during the year across all regions.
P&C business operating profit in 2020 was USD 2.1 billion, 28 %lower than in the previous year. The decline was mainly driven by the impact of the COVID-19 outbreak, higher catastrophe losses than in the previous year, as well as a lower investment result. The overall impact of the COVID-19 outbreak on Property & Casualty was USD 544 million, including USD 450 million of claims net of frequency benefits and premium refunds.
The net investment result declined by USD 126 million compared to the previous year, with lower reinvestment yields leading to reduced investment income, which was partially offset by a strong performance from hedge funds.
The contribution of other items, which include the net non-technical result and non-controlling interests, was USD 173 million lower than in the previous year. This was driven by a combination of non-recurring charges, lower income from cash and cash equivalents, and an operating loss at Cover-More, the Group's specialist travel and assistance provider, which saw a sharp decline in sales as a result of widespread travel restrictions to counter the COVID-19 outbreak.
The 2020 combined ratio of 98.4% was 2 percentage points higher than in the previous year. The deterioration was entirely driven by COVID-19 claims and higher catastrophes, while underlying performance continued to improve year on year.
Life business operating profit for 2020 was USD 1.4 billion, 4 % below the prior year. Excluding COVID-19 effects of USD 173 million life business operating profit grew 7 percent despite adverse movements in exchange rates and a lower contribution from favorable one-off items mainly in EMEA.
In EMEA, business operating profit was impacted by the COVID-19 outbreak, mainly in the UK and to a lesser extent in Switzerland and Zurich International. On a reported basis, business operating profit decreased by 9 percent compared to the prior year. Adjusted for COVID-19, business operating profit increased 6 percent mainly driven by Switzerland and the joint venture with Banco Sabadell in Spain.
Net inflows of USD 4.3 billion were USD 2.0 billion lower than in the prior year. On a like-for-like basis net inflows were down USD 1.3 billion, mainly driven by EMEA, which benefitted from one-time inflows in Switzerland in 2019.
Full-year 2020 results demonstrated a strong performance in a challenging environment. "In 2020, we proved the solidity of our balance sheet, the agility of our people and the timeliness of our digital strategy: all of which helped us to quickly adapt to new ways of serving our customers and protecting our employees", said Mario Greco, Group Chief Executive Officer at Zurich.
Michel M. Lies, Chairman of the Board also stated: "Our commitment to bringing benefits to all stakeholders has rarely been as sorely tested or proven its relevance so convincingly". He added: "Our focus on recovery from the pandemic and our contribution will continue to be guided by our environmental, social and governance goals."