Zurich Insurance Group (ZURN) Q2 2024 earnings summary

Executive summary

• Achieved record business operating profit (BOP) of USD 4.0 billion (CHF 4 billion), up 7% year-over-year, and highest ever BOPAT ROE at 25% for H1 2024.

• Net income attributable to shareholders rose 21% to USD 3.0 billion; EPS up 23% to USD 20.8.

• All segments contributed to profit growth, with record BOPs in Life and Farmers and strong P&C performance.

• Completed acquisition of 70% of Kotak General Insurance in India and announced agreement to acquire AIG's personal travel insurance business.

• Group solvency remains strong with SST ratio at 232%, well above the 160% target; share buyback program ongoing.

Financial highlights

• Group BOP up 10% in local currencies and 7% on a reported basis; P&C BOP at USD 2,224 million (CHF 2.2 billion), up 3% like-for-like; combined ratio at 93.6%.

• Life BOP reached USD 1,048 million (CHF 1 billion), an all-time high; short-term protection revenues up 25% year-on-year.

• Farmers BOP up 12% to USD 1,115 million; Farmers Management Services BOP grew 10% year-on-year; Farmers Exchanges combined ratio improved to 95.2%.

• Insurance revenue in P&C grew 7% in H1; Life short-term protection revenues up 12% like-for-like.

• Group investments averaged USD 149.2 billion, with a net investment return of 2.3% (up from 1.8%).

Outlook and guidance

• On track to achieve compound EPS growth above 10% for the 2023-2025 period; outlook unchanged since February.

• Confident in exceeding all cycle targets; market conditions remain favorable, especially in commercial lines.

• Retail P&C expected to improve, with focus on Germany and Switzerland for further margin enhancement.

• Farmers policy count expected to return to growth in 2025 as portfolio exits complete.

• Life FY-24 BOP expected at least in line with record FY-23; Farmers Exchanges GWP to grow mid-single digit.