November 10, 2017 by Canadian Underwriter
Property & Casualty gross written premiums (GWP) for the nine months ending Sept. 30 declined 2% in U.S. dollars to US$25.3 billion from US$25.7 billion, Zurich Insurance Group reported on Thursday.
In particular, P&C GWP in North America for 9M 2017 was US$11.6 billion compared to US$11.58 billion in 9M 2016; about US$11 billion for Europe, the Middle East and Africa, down 7% from US$11.7 billion in 9M 2016; US$1.75 billion in the first nine months of this year for Asia Pacific, down from US$1.68 billion in the same period last year; and about US$2 billion in 9M 2017 for Latin America, up 11% from US$1.76 billion in 9M 2016.
Although P&C GWP for the first nine months of the year declined 2% in U.S. dollar terms, they rose 1% in local currency after adjusting for acquisitions and disposals. Rates overall increased by around 1%, mainly driven by EMEA, Zurich said in a press release.
As reported on Oct. 19, aggregate claims in the third quarter of 2017 related to Hurricanes Harvey, Irma and Maria, for the Group’s P&C business, are estimated to be approximately US$700 million net of reinsurance and before tax. “These events will result in estimated net-of-tax losses of US$620 million with a consequent negative impact on the Group’s effective tax rate for the year,” the release said, noting that there were a number of other natural-catastrophe and weather-related events during the third quarter, including the Mexican earthquakes and severe storms and floods in EMEA and Asia.
Farmers Exchanges, which are owned by their policyholders, reported GWP of US$15.2 billion, up 1% from US$15 billion in 9M 2016. In the first nine months of 2017, GWP from continuing operations (discontinued operations include 21st Century business outside of California and Hawaii and other discontinued operations) were up 3%, with growth across most books of business, the release said. As in the first half of the year, this was partially offset by the run-off of discontinued operations. Rate and underwriting actions taken to improve profitability in Auto have continued to benefit the combined ratio ex-natural catastrophes, the release added.
The Group expects overall restructuring costs for the full year to be no more than the US$500 million previously indicated. It is expected that around US$150 million of these will be taken as one-off charges in the business operating profit, with the balance taken below the operating line. The P&C share within the business operating profit will be part of the non-technical result.
Group Chief Financial Officer George Quinn said that he was “pleased with the development of our businesses in the year to date, particularly against a challenging industry backdrop in the third quarter. We expect the third quarter natural catastrophe events to drive improvements in pricing across our business. New business volumes and customer retention in Property & Casualty and Life are both up, while the Farmers Exchanges continue to deliver consistent growth. The Group is strongly capitalized and has continued to make progress against its strategic targets,” Quinn concluded.
Zurich is a multi-line insurer that serves its customers in global and local markets. With about 54,000 employees, it provides a wide range of P&C and life insurance products and services in more than 210 countries and territories. Zurich’s customers include individuals, small businesses, and mid-sized and large companies, as well as multinational corporations. The Group is headquartered in Zurich, Switzerland, where it was founded in 1872.