Zurich Insurance Group has started the year well and expects to exceed all of its financial targets for 2022, despite continuing inflationary pressures. The company has little exposure to the war in Ukraine.

Premium rates will continue to outpace loss cost trends through 2023, according to Zurich in its first quarter earnings report (which does not provide net income figures).

Given the group’s very strong performance over the past two years “and given the positive operational trends we are seeing in the first quarter, we are very confident that you will see us exceed all of our targets by the end of this year” , said George Quinn, the group’s chief financial officer, during a press briefing to discuss the results.

Zurich said property and casualty gross written premiums in the first quarter rose 8%, or 12% on a like-for-like basis (adjusted for currency movements), to nearly $12 billion from $11 billion. dollars in the first quarter of 2021.

Growth was driven by high premium rates in commercial insurance, the company said.

“We have seen premium increases across the group, particularly in our North American property and casualty business, where crop insurance and rate increases have driven double-digit revenue growth. “Quinn said in a statement.

Zurich’s first quarter gross written premiums in North America were up 17% compared to the same quarter a year ago. Around 40% of this growth was contributed by the group’s crop insurance business, RCIS.

“A good overall performance [in North America] was supported by a 9% increase in rates,” the insurer said.

At the news conference, Quinn said, rising agricultural commodity prices have been a big factor in driving crop insurance premiums higher as underlying crops rise in value.

The main news from Zurich’s first quarter results “is that commercial line pricing is still well above claims cost inflation,” Berenberg Capital Markets said in a research note. “Zurich pointed out that inflationary concerns are supporting further rate hikes and therefore non-life combined ratio margins are now expected to peak in 2024 rather than 2023.”

In addition, Berenberg said Zurich’s natural catastrophe claim costs are in line with an expected loss cost budget of 3.5% in terms of the combined ratio and that the insurer is “using this difficult market period to further reduce its exposure to natural disasters”.

Addressing the impact of the war in Ukraine, Quinn noted that while the insurance industry is likely to suffer significant losses, Zurich does not expect large insurance claims from the conflict.

As of March 31, 2022, Zurich’s Swiss Solvency Test (SST) ratio is estimated at 234% (vs. 212% in Q1 2021) and remains well above the group’s target level of 160%.

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