Zurich Insurance Reports Strong Surge in Earnings as COVID-19 Impact Eases

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Zurich Insurance Group’s on Thursday joined other big European insurers in reporting a strong rebound in earnings as the impact from COVID-19 on their businesses eased.

Buoyant markets along with higher policy sales helped the insurers’ profits to roar back after a tough 2020.

In the Netherlands, NN Group reported a doubling in its first-half net profit, while Aegon recovered from a loss a year earlier to post a second-quarter net profit of 849 million euros ($996.13 million).

Zurich’s shares gained around 3%, whilst Aegon rose 6% and NN was up 2.4%.

Zurich’s operating profit jumped 60% to $2.7 billion in the first half of 2021, which compared with expectations for first-half business operating profit of around $2.5 billion, based on a company-compiled consensus.

Zurich Chief Executive Mario Greco had told Reuters in June that Europe’s fifth-largest insurer expected a “strong rebound” in profits in 2021.

“We achieved outstanding results in the first six months of 2021 with profits back to the levels of 2019, when we reported our best first half in a decade,” Greco said in a statement.

“This is a remarkable achievement considering the elevated natural catastrophe losses in the period and the ongoing public health crisis.”

The group’s Chief Financial Officer George Quinn said Zurich’s exposure to last month’s severe German floods was around $150-$200 million, although he said the claims process was still at an early stage.

Zurich’s net income attributable to shareholders rose 86% to $2.19 billion thanks to the operating profit boost and higher levels of realized capital gains.

Its Swiss Solvency Test (SST) ratio of 206% showed strong capitalization, it said, adding it remained on track to achieve 2022 targets.

The Swiss company took a $73 million hit to operating profit from COVID-19, down from $686 million in the first half of 2020.

Higher mortality-related claims in life insurance offset a net favorable impact in property and casualty, where reduced claims frequency associated with COVID-19 restrictions more than compensated for COVID-19 related claims, it said.

It saw significant rate increases in commercial business across all regions, with these trends expected to continue through the second half of the year.

($1 = 0.8523 euros) ($1 = 0.7213 pounds) (Reporting by Michael Shields, editing by Kirsti Knolle, John Revill, Kim Coghill and Jane Merriman)