Chief Executive Officer Martin Senn said:
"While we made good progress last year in executing the strategy we set out in December 2013, we cannot be satisfied with our 2014 earnings. In General Insurance, we continue to make good progress in improving our accident year combined ratio, although the results show that we have still much to do in our turnaround businesses, and in driving further improvement across the book. In Global Life, we see good momentum in our priority life markets, and expect to start seeing the benefits of in-force management initiatives coming through in our earnings over the next two years. At Farmers, the positive story continues, with two consecutive quarters of growth and a continuation of positive trends in all key metrics."
"Our solvency capital continues to be very strong and we are well on track to deliver more than USD 9 billion of cash remittances by 2016, even with the impact from currency headwinds. Reflecting the stability of our business and our strong capital position, the Board will propose a dividend of CHF 17 per share. In 2015, we continue to execute on our three strategic cornerstones - prioritizing investment in distinctive positions, managing other businesses for value and growing our operating earnings. This approach is designed to improve our profitability and address the challenges of a prolonged low yield and low growth environment."
General Insurance (GI) gross written premiums increased in local currency terms led by the Group's priority markets. GI made good progress in improving the portfolio, with an improved current year underwriting result offset by lower releases on reserves established in prior years.
Global Life (GL) delivered strong growth in the priority markets of U.S. and UK retail, bank distribution and Corporate Life & Pensions. BOP was broadly flat compared with the prior year.
Gross written premiums at the Farmers Exchanges, which are owned by their policy holders, ended the year broadly flat as gains in the second half of the year offset a modest decline in the first half. This compares to a 2% decline in 2013. There are other positive signs that Farmers go-to-market strategy is beginning to pay off. Customer experience, as measured by the Net Promoter Score, improved considerably in the fourth quarter, while customer retention rose to 76.8% at the end of 2014 from 74.8% at the end of 2013.
Other Operating Businesses reported a business operating loss of USD 960 million, compared with a loss of USD 1,039 million in 2013.
The Non-Core Businesses recorded a business operating loss of USD 142 million compared with a business operating profit of USD 73 million in 2013. The deterioration arose from reserve increases relating to long-tail businesses in run-off.
Solvency measured on an economic basis as determined under the Swiss Solvency Test (SST)5 decreased by 2 percentage points since January 1, 2014 to 215% as of July 1, 2014. The Zurich Economic Capital Model (Z-ECM) ratio stood at 127% as of October 1, 2014, above the target range of 100% to 120%. Shareholders' equity has increased since December 31, 2013 by USD 2.2 billion to USD 34.7 billion. This was driven by the positive effects of net income and net unrealized gains on investments, partially offset by the currency translation effect of the strong U.S. dollar at December 31, 2014, and after deducting the total cost of USD 2.8 billion for the dividend paid in April 2014.
Subject to shareholder approval at the AGM of April 1, 2015, the proposed 2014 dividend will be paid from Zurich Insurance Group Ltd's capital contribution reserves.
Zurich today announced that Cecilia Reyes, Chief Investment Officer, will take on the additional responsibility of Regional Chairman of Asia Pacific, succeeding Geoff Riddell, who will be retiring. Mr. Riddell, who will step down from the Group Executive Committee effective end of March 2015, will continue to be involved for a transition period as Mrs. Reyes assumes her additional role effective April 1, 2015.
Zurich Chief Executive Officer Martin Senn commented: "I am delighted to see Cecilia Reyes add to her responsibilities. With her strong track record as CIO and diverse international experience, Cecilia is very well positioned to represent the interests of Zurich in this key region. At the same time, I would like to thank Geoff for his outstanding contributions to the Group. Geoff has held a number of roles since he joined Zurich in 2000, including serving as a member of our Group Executive Committee for more than a decade, and has been a valued contributor to the company's success."
Read the full story ZURICH reports business operating profit of USD 4.6 billion for 2014 and proposes dividend of CHF 17