Zurich sees record operating profit in 2024 as P&C CoR improves to 94.2%

Zurich has reported a record business operating profit for 2024 of $7.8 billion, while its P&C business continued to improve by focusing on underwriting discipline, with a combined ratio of 94.2%.

Operating profit in the P&C business alone was 4.2 billion million in 2024, up 8% compared to 2023.

Meanwhile, gross written premiums in this segment in 2024 grew 5% compared to 2023. Still, less favourable commodity prices in the U.S. crop business led to a reduction of $600 million in gross written premiums. Excluding crop, gross written premiums in the P&C segment reportedly increased 7%.

As mentioned, the combined ratio for Zurich’s P&C business in 2024 was 94.2%, 0.2 percentage better than in 2023.

According to the firm, a strong improvement in the loss ratio was partially offset by an increase in the expense ratio.

Turning to Zurich’s Life business, operating profit grew 8% in 2024 to a record-high $2.2 billion. According to the firm, the EMEA region benefited from strong performance in fee-based businesses, growth in the contractual service margin, a higher investment result, favourable experience in Germany and the UK, and approximately $150 million in non-recurring benefits.

In Asia Pacific and North America, underlying growth was offset by the absence of favourable one-off impacts seen in the prior year.

Meanwhile, in Latin America, operating profit was impacted by adverse market movements in Argentina, primarily in the first half of the year, though the technical result from short-term protection products continued to grow.

Life gross premiums and new business premiums increased by 4% and 5%, respectively, on a like-for-like basis, driven by strong growth in Zurich’s preferred lines of protection and unit-linked products.

As for the Farmers segment, an operating profit of $2.3 billion was in line with the record level achieved in 2023, while the combined ratio improved to 91.4%.

Concurrently, a record Farmers Management Services result was supported by higher gross earned premiums by the Farmers Exchanges and lower operating expenses.

With all this in mind, Zurich’s total business operating profit in 2024 was $7.8 billion, while return on equity stood at 24.6%, and cash remittances stood at $7.1 billion.

Mario Greco, Group Chief Executive Officer at Zurich, commented, “All our businesses delivered an outstanding performance in 2024. P&C and Life posted their best-ever results, and Farmers grew profitably.

“We continue to experience positive rate momentum in our commercial business and a healthy pricing environment in retail, positioning us strongly at the start of the new cycle for which we have already set our most ambitious targets yet.

“This reinforces our ability to execute and deliver on our plans and our commitment to create consistent long-term value for all our stakeholders.”

Shedding light on the impact of the California wildfires, Zurich reiterated that, as communicated by the Farmers Exchanges, initial estimates indicate an expected net pre-tax loss of $600 million and approximately $250 million in reinstatement premium payments.

The company noted that Farmers’ strong capital base and underlying profitability position it well to manage this event and continue growing the business. For Zurich, the estimated pre-tax impact, including Farmers Re, is $200 million.

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