ZURICH (Reuters) – Zurich Insurance plans to increase its dividend and says it is confident of meeting its 2022 targets after property and casualty insurance premiums rose 11% on a like-for-like basis in the first nine months of 2021.
“We certainly intend to increase the dividend, but I can’t comment specifically on what will happen this year,” chief financial officer George Quinn told reporters on a call.
Europe’s fifth-largest insurer already returns 75% of what it earns to investors, he noted, downplaying prospects of using its strong balance sheet to also launch share buybacks.
“We prefer to try to use this additional capital to really support new business growth, which will eventually support earnings growth, which will again support dividend growth. That’s our priority,” Quinn said.
Shares of Zurich fell 2% in early trading, with analysts saying its strong delivery was nothing to lift the stock.
P&C premiums swelled to $31.15 billion in the first nine months, a dollar gain of 14%.
Those premiums continue to benefit from the improving pricing environment and recent claims events were likely to stretch the “hard” market, Quinn said in the earnings release that gave no earnings numbers.
Major flooding in Germany, a series of other weather events in Europe in July and Hurricane Ida in the United States hit in the third quarter. Quinn said Ida alone would result in an impact of $450 million and flood claims would be $150-200 million, as previously projected.
Zurich was making money despite disaster losses that are 3 to 4 percentage points above the long-term average.
In the first nine months, its new business in annual premium equivalent (APE) in life insurance increased by 5% on a like-for-like basis after adjusting for changes in foreign exchange, acquisitions and disposals.
“We continue to see areas of excess COVID-related mortality within life, but the overall strength of the business allows it to be absorbed without materially impacting 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.
(Reporting by Michael Shields; Editing by Emma Thomasson, Robert Birsel and Alexander Smith)
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