Zurich Insurance plans share buyback as premiums rise

ZURICH Insurance Group said on Thursday (Nov 9) it planned a share buyback after property and casualty premiums rose 9 per cent in the first nine months to US$34.6 billion due to strong growth in commercial and retail insurance.

Zurich completed a US$2 billion buyback programme in June.

Insurers have held onto profits in recent years in the face of the Covid-19 pandemic, war in Ukraine and natural catastrophes by raising premium rates and cutting back on riskier business.

Europe’s fifth-largest insurer reported a Swiss Solvency Test (SST) ratio of 266 per cent, against a forecast of 270 per cent, according to a company-compiled consensus poll. Zurich’s target level for the ratio is 160 per cent.

The insurer was “confident that we’ll be able to finish the year strongly and achieve our financial targets for 2023–2025”, chief financial officer George Quinn said in a statement.

KBW analysts estimated that Zurich could offer a share buyback of US$1-1.5 billion.

Zurich’s life insurance present value of new business premiums for the first nine months rose 23 per cent to US$12.2 billion on a like-for-like basis that adjusts for currency movements, acquisitions and disposals.

Quinn said on a media call that Zurich did not suffer major losses from floods in Europe this year, adding that the insurer has been “significantly reducing catastrophe exposure” across its business.

Rival AXA’s shares fell last week due to its natural catastrophe exposure.

SEE ALSO

Zurich Insurance bets on India with US$487 million stake in Kotak arm

Vontobel analysts said Zurich’s results should be “taken positively”, reiterating their “hold” rating on the stock.

Zurich’s shares ticked up 0.28 per cent at 0801 GMT, compared with a 0.75 per cent fall in European insurance stocks. REUTERS