Zurich reports 9% increase in gross written premium amid tough underwriting conditions

02 August 2013 Edwyn O?Neill, Zurich
Edwyn O?Neill, Chief Executive Officer, Zurich.

Edwyn O?Neill, Chief Executive Officer, Zurich.

Zurich’s half-year results demonstrate a continued focus on improving the underlying profitability of the Company.

• Interim dividend of 100 cents per share declared
• Premium volumes improved by 9%
• Solvency remains strong at 63.7%

Premium volumes reflect a 9% improvement from the previous period to R2.0 billion (2012: R1.9 billion). This improvement was driven by Zurich’s targeted growth and retention initiatives which are starting to take hold. Net earned premium was 8% higher than the prior period to R1.6 billion (2012: R1.4 billion). The Company’s underwriting result deteriorated in the current year due to an increase in claims in the property portfolio and motor in the personal segment. Ongoing actions will however continue to be taken to improve underwriting profitability.

Commenting on the results, Chief Executive Officer, Edwyn O’Neill, said:

“We are pleased to see progress in various strategic initiatives aimed at investing in high-potential growth areas and streamlining the business in all other areas. These initiatives will gain further momentum into 2014. The growth in gross written premium is in line with expectations, however the bottom line for the first half of the year was disappointing.”

Operating expenses increased by 7% to R272.5 million (2012: R255.8 million) as the Company positions itself for various growth initiatives. The launches of the Global Corporate, Body Corporate, Travel and Wineries Insurance offerings have been well received and will allow us to shape solutions that help our customers to manage their risk.
Net acquisition costs, which increased by 14%, were impacted by a change in the portfolio mix and the payment of binder fees. Attributable investment income is at R43.6 million compared to the prior year at R47.6 million due to lower interest rates.

O’Neill continues: “The Group remains focused on achieving profitable growth which is expected to come from the traditional intermediary channel and from a number of alternative distribution channel initiatives that have already shown exciting prospects.”

“Going forward, we will continue to invest in enhancing our propositions and services and continue with our product diversification strategy to the benefit of brokers and customers,” O’Neill concludes.
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