New Zurich Insurance Group CFO George Quinn is only in his first full month on the job, but he confidently touted a solid 2014 first quarter performance in a pre-filmed video for analysts and the media.
At the end of the financial roundup, he also took a moment to get personal. Quinn thanked Group Controller Vibhu Sharma for “leading Zurich’s finance team through a very challenging time.” Sharma stepped in as interim CFO last August after then-CFO Pierre Wauthier committed suicide. He served in that role into early May, when Quinn, formerly CFO at Swiss Re, took the Zurich CFO slot.
“He’s done an outstanding job and I am very much looking forward to working with him and all of my colleagues” Quinn said.
That personal note concluded a presentation where both Quinn and Sharma focused on Zurich’s accomplishments so far this year: higher net income, greater investment returns and a combined ratio that improved thanks, in part, to lower overall catastrophe losses.
Net income attributable to shareholders hit the $1.3 billion mark for the three-month period ending March 31, up from $1 billion generated during the same period in 2014.
That gain comes as the Swiss insurer continues a program to slash jobs and streamline the company, in part to remove management layers between the Group and its individual business units.
“We see this as a solid start to the year across our general insurance, life and Farmers businesses,” Quinn said. “Our focus continues to be on improving accident-year profitability, and there are a number of actions underway to achieve this.”
Among highlights from Zurich’s results:
- The company’s general insurance arm produced a combined ratio of 93.9, versus 94.9 in the 2013 first quarter. Business operating profit for the division jumped to $845 million, a 5 percent hike over the previous year, though gross written premiums remained flat year-over-year. Net underwriting results jumped to $456 million for the quarter, an $89 million increase over first-quarter 2013.
- Zurich’s global life business operating profit climbed by $12 million to $319 million, a 4 percent increase in U.S. dollar terms over the same period a year ago. Gross written premiums, policy fees and insurance deposits for the division landed at $7 billion, a $331 million expansion over the 2013 first quarter.
- Zurich’s Farmers division produced $415 million in business operating profit in the 2014 first quarter, about equal to the 2013 first quarter. Zurich’s Farmers Exchanges, owned by their policyholders and managed by Zurich Group subsidiary Farmers Inc., reported a decline in gross written premiums that narrowed to 2 percent. That’s an improvement over a 4 percent decline in the 2013 fourth quarter. But operating profit in the Farmers Management Services line continued to stay flat, Zurich said.
Zurich Insurance Group’s solvency measure is improving. According to the company, its solvency (measured by the Swiss Solvency Test) is now at 217 percent as of Jan. 1, 2014, 11 percent higher than in July 1, 2013. This ratio gets calculated twice a year, and is reviewed by the Swiss Financial market Supervisory Authority.
Sharma said during that call that over the fourth quarter of 2013 and the 2014 first quarter, Zurich has incurred $350 million out of $600 million in promised total accounting and restructuring charges. The rest—$250 million—should hit in the second quarter, with nearly all of those costs landing outside of business operating profit,” Sharma said.
Sharma said Zurich is experiencing global “positive momentum in casualty and specialty risks, but some market pressure in its U.S. property lines.” As well, the company wrote less new captive business in its 2014 first quarter. But retention remained good, and moderate growth in casualty and specialty is expected over the year, he said.
“We are making progress and the majority of our portfolio is in good shape. But more needs to be done if we are to achieve our goals,” Sharma said during the investor presentation.