Business operating profit (BOP) for 2019, was USD 5.3 billion, up 16% compared with the prior year period. This was driven by underlying growth across the business and a strong underwriting performance in Property & Casualty (P&C).
Zurich Insurance Group FY2019 (12 months) figures, y-o-y changes
- Total revenues: USD 71,242 million (+53.3%)
- Gross written premiums and policy fees: USD 50,525 million (+2.1%), of which:
- Property & Casualty: USD 34,184 million (+2.0%), of which:
- EMEA: USD 14,558 million (-0.3%)
- North America: USD 15,223 million (+3.4%)
- Asia Pacific: USD 3,030 million (+6.0%)
- Latin America: USD 2,871 million (+6.2%)
- Life: USD 15,151 million (+2.7%), of which:
- EMEA: USD 9,589 million (-5.1%)
- North America: USD 461 million (+13.4%)
- Asia Pacific: USD 2,055 million (+49.0%)
- Latin America: USD 3,056 million (+6.3%)
- Farmers: USD 1,056 million (-3.5%)
- Property & Casualty: USD 34,184 million (+2.0%), of which:
- Net investment result on Group investments: USD 6,546 million (+17.6%)
- P&C combined ratio: 96.4% (-1.4 pp.)
- Benefits, losses and expenses: USD 64,462 million (+59.4%)
- Business operating profit (BOP): USD 5,302 million (+16.1%)
- Net income (NIAS): USD 4,147 million (+11.6%)
Property & Casualty (P&C) results demonstrate further strong year-on-year progress with BOP up 38%. This was driven by an improved underwriting performance and higher investment results, which more than compensated for a challenging year in the North American crop business.
P&C gross written premiums grew 6% on a like-for-like basis, adjusting for currency movements, acquisitions and disposals, with growth achieved in all regions. In U.S. dollars gross written premiums grew 2%.
P&C combined ratio for 2019 of 96.4% improved by 1.4 percentage points year-on-year driven by a reduction in the underlying accident year combined ratio excluding natural catastrophes of 0.6 percentage points, and a lower level of natural catastrophe losses.
Life results were strong against the high prior year level. BOP increased 2%. Underlying growth in EMEA and Latin America more than compensated for a decline in Asia Pacific and North America. As reported in U.S. dollars, BOP declined 4% due to a stronger U.S. dollar relative to a number of key currencies.
Life new annual premium equivalent (APE) sales declined 7%. Underlying growth was achieved in all regions, with particular growth coming from the corporate pension business in Switzerland, higher unit-linked sales in Brazil and Italy, as well as the retail protection business in the UK. This was offset by the absence of two large corporate protection schemes written in the prior year and the impact of currency movements.
Life new business value (NBV) decreased 1%. Higher underlying margins as a result of improved business and country mix together with positive operating assumption changes were offset by adverse updates to economic assumptions and unfavorable foreign currency translation effects. The new business margin increased by 1.8 percentage points to 25.8%.
Farmers BOP of USD 1,707 million was 4% higher than the prior year. This was driven by a positive performance in both Farmers Management Services and Farmers Life, which offset lower earnings from Farmers Re.
Farmers' gross written premiums increased by 2% compared to the prior year, with growth coming from all lines of business. The agreement with Uber to provide commercial rideshare insurance was also broadened.
The Farmers Exchanges' combined ratio stood at 100.0%, broadly in line with the prior year. The Farmers Exchanges' surplus ratio increased by 2.0 percentage points to 41.5%. Farmers Management Services (FMS) management fees and other related revenues increased 18% compared to the prior year. Farmers Life new business APE was 3% lower than in the prior year, while new business value decreased by 18% driven by lower sales volumes, modeling changes, and the impact of assumption updates made in the prior year.
Group Functions & Operations net operating loss of USD 716 million was USD 36 million lower than in the prior year. The improvement was driven by a further reduction in headquarter expenses.
The Group's Non-Core Businesses, which comprise run-off portfolios that are managed with the intention of proactively reducing risk and releasing capital, reported an operating loss of USD 52 million. The loss reflected the net impact of previously announced transactions to exit legacy portfolios related to UK employer's liability, U.S. asbestos and environmental business, and German professional architects' and engineers' professional indemnity.
The net investment result on Group investments, which includes net investment income, realized net capital gains, and losses and impairments, contributed USD 7.4 billion to the Group's total revenues for the full year of 2019, up 18% on the prior year. The net return on Group investments was 3.9%.
Shareholders' equity increased by 16% to USD 35.0 billion over the year mainly as a result of movements in asset values, with net income of USD 4.1 billion partially offset by the capital returned to shareholders through dividends.
Mario Greco, Group Chief Executive Officer, commented:
"Today's results confirm that we have successfully executed our plans over the last three years. It was an amazing journey, during which we significantly strengthened the business, organically and through transactions, reduced P&L volatility and improved customer services. This is also reflected in a further proposed increase of our dividend to CHF 20 per share, the third increase in a row. (...) We look forward with real confidence and excitement as we continue our strategic journey. (...) We remain committed to supporting our customers, employees and communities in facing challenges such as climate change and work security, and will continue to play a leading role in building a more sustainable future."
More financial information about Zurich Insurance Group can be found at https://www.zurich.com/investor-relations.