Feb 19 (Reuters) - Zurich Insurance beat market expectations for annual operating earnings on Thursday, fuelled by a better-than expected performance in its property and casualty business. Europe's
Zurich Insurance Surpasses Profit Forecasts with P&C Division
By Tristan Veyet
Feb 19 (Reuters) - Zurich Insurance beat market expectations for annual operating earnings on Thursday, fuelled by a better-than-expected performance in its property and casualty business, responsible for more than half of its gains.
Zurich Insurance's Financial Performance
Europe's second-largest insurer by market capitalisation reported an operating profit of $8.86 billion, above analysts' median estimate of $8.76 billion, according to a company-provided poll.
The P&C unit, Zurich's core business that led the broad-based consensus beat, reported an operating profit of $5.13 billion, benefitting from higher insurance revenue and an improved combined ratio of 92.6%.
However, the company's shares fell slightly in early trading, with analyst Roland Pfaender from Oddo Bhf saying the P&C insurance expense ratio was higher than expected.
Future Targets and Dividend Plans
The Swiss insurer is on track to achieve or even exceed its 2027 targets, CEO Mario Greco said in a statement. It is aiming for a core return on equity of more than 23% between 2025 and 2027 and for cumulative cash generation exceeding $19 billion in the same period.
Zurich Insurance said it would propose a dividend of 30 Swiss francs ($39) per share, in line with analysts' expectations.
It did not provide new details on its potential bid for British speciality insurer Beazley.
Impact of AI on Insurance Industry
AI SHIFT WON'T CUT JOBS, CEO SAYS
Renewed concerns that new artificial intelligence tools could accelerate disruption in the insurance sector have weighed on shares this year, with the industry valuations down 3.3% in Europe since the start of January.
During a post-earnings call with journalists, Greco doubled down on the company's commitment to the AI shift, while saying he did not expect introduction of these tools to lead to job reductions.
"I don't think AI is going to cut jobs overall, but it will diversify the skills needed to continue doing the job," he told reporters.
Greco said Zurich Insurance was accelerating investments into AI, notably through the previously announced plan to open an AI lab "soon", though the exact timeline has not been specified.
($1 = 0.7728 Swiss francs)
(Reporting by Tristan Veyet in Gdansk, editing by Milla Nissi-Prussak.)
