Optimist Zurich Insurance posts highest profit since financial crisis


The Zurich Insurance logo is seen in Davos, Switzerland January 20, 2020. REUTERS/Arnd Wiegmann

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  • Operating profit $5.7 billion
  • Interest in German Life Books – CEO
  • Stocks have changed little

LONDON, Feb 10 (Reuters) – Zurich Insurance (ZURN.S) expects continued revenue and profit growth over the next two years, its chief financial officer said on Thursday, after the Swiss insurer announced its biggest annual profit since the financial crisis.

Insurers were gloomy about the outlook when the pandemic took hold in early 2020, but remained profitable after excluding COVID-19 from many policies and raising premiums.

Zurich, Europe’s fifth-largest insurer, reported a better-than-expected 35% increase in operating profit in 2021 to $5.7 billion, its highest level since 2007, helped by a strong performance in its business and lower claims related to COVID-19.

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Operating profit was expected at $5.5 billion, according to a consensus forecast compiled by the company.

“You see growth in revenue and earnings. It will continue through 2022 and I expect that stage at least in 2023,” Chief Financial Officer George Quinn said in a call with reporters after Zurich said it expects to meet or exceed its 2022 financial targets.

Zurich shares were little changed at 09:05 GMT against a 0.33% rise in European insurance stocks (.SXIP). Vontobel said it maintained its “hold” recommendation on the stock, given “high valuation multiples relative to its European and US peers.”

The insurer set three-year targets in November 2019, including raising its after-tax operating profit target on equity to over 14% from the previous target of over 12%. Return on equity was 14% for 2021.

Zurich plans to sell more life insurance books that are closed to new customers, after announcing last month that it would free up around $1.2 billion in capital by selling its Italian life insurance and pensions portfolio to the Portuguese GamaLife. Read more

Zurich has already been interested in some of its closed German life books but was not yet at the final offer stage, chief executive Mario Greco told Reuters, adding that a deal would take a few months but would be “much bigger” than Italian. to sell.

Zurich has proposed a dividend of 22 Swiss francs per share, up 10% on the previous year.

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Reporting by Carolyn Cohn; Editing by Michael Shields, Carmel Crimmins and Alexander Smith

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