Zurich Insurance expects dividends to rise as premiums rise

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The Zurich insurance logo is seen in an office building in Zurich, Switzerland on August 9, 2018. REUTERS / Arnd Wiegmann

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  • Insurer sees solid activity continuing unabated
  • CFO said the intention was to increase the dividend
  • Shares down 2% at the start of the session

ZURICH, Nov. 11 (Reuters) – Zurich Insurance (ZURN.S) plans to increase its dividend and is confident of meeting its 2022 targets after property and casualty premiums increased 11% at constant scope in the first nine months of 2021.

“It is certainly our intention to increase the dividend, but I cannot comment specifically on what will happen for this year,” CFO George Quinn told reporters on a call.

Europe’s fifth-largest insurer already pays back 75% of what it earns to investors, he noted, downplaying the prospects of using its strong balance sheet to initiate share buybacks as well.

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“We prefer to try to use this additional capital to actually support the growth of new businesses, which will eventually support earnings growth, which will again support dividend growth. This is the priority for us,” Quinn said. .

Zurich shares fell 2% early in the session, with analysts saying its solid delivery was nothing to push the stock up.

P&C premiums swelled to $ 31.15 billion in the first nine months, a dollar gain of 14%.

These premiums continue to benefit from the improving pricing environment and recent claims were likely to expand the “hard” market, Quinn said in the earnings release, which did not give any earnings figures.

Major flooding in Germany, a series of other weather events in Europe in July and Hurricane Ida in the United States hit the country in the third quarter. Quinn said Ida alone would bring a hit of $ 450 million, and flood claims would rise to $ 150-200 million, as previously predicted.

Zurich was making money despite catastrophic losses 3-4 percentage points above the long-term average.

During the first nine months, its annual premium equivalent (APE) new life insurance business increased by 5% at constant scope adjusted for currency fluctuations, acquisitions and disposals.

“We continue to see areas of excess COVID-related mortality throughout life, but the overall strength of the company allows this to be absorbed without having a significant impact on the segment’s financial results,” he said. declared.

Its Swiss Solvency Test (SST) capital ratio was estimated at 203%, well above its target of at least 160%, as of September 30.

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Reporting by Michael Shields; Editing by Emma Thomasson, Robert Birsel and Alexander Smith

Our Standards: Thomson Reuters Trust Principles.


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