Morningstar | Zurich Insurance Reports Bland Nine-Month Indicators
Zurich Insurance reported key indicators for the first nine months of 2018. This is a very light press release and gives us very little insight into the underlying performance of the business. We maintain our CHF 312.0 fair value estimate and narrow moat and stable moat trend ratings.The property and casualty division reported gross written premiums of USD 25.87 billion. While that’s all well and good, it gives us no colour into profitability. We think this is probably a little ahead of our expectations. While management claims the pricing environment has been stable, we really want to see how the commercial business is doing and whether rate increases have been achieved and sustained in particular in United States fleet motors.
The estimated loss for Hurricane Michael is estimated to come in at around USD 175 million, which to use looks like quite a large single exposure.
Headline performance in life is very good. But adjusted for currency and U.K. workplace disposal, annual premium equivalent growth is around 3.0%. In Farmers, the business continues with its expansion into Eastern states. This looks to be going well, with a greater than 15% rise in gross premiums. However, again we have no indication on the management fee margin and the underwriting profitability of the underlying Farmers Exchanges.
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