Zurich(US:ZURVY)2025-02-20 20:44Financial Data and Key Metrics Changes - The group reported a record BOP of $7.8 billion, up 5% year-over-year, indicating strong business momentum [7][23]. - Core ROE increased to 24.6%, up 1.6 percentage points from 2023, showcasing efficient capital allocation [8][24]. - Cash remittances reached $7.1 billion, reflecting a 34% increase in NIAS earnings and ongoing dynamic capital management [8][24]. Business Segment Data and Key Metrics Changes - Life BOP grew 9% like-for-like to a record $2.2 billion, driven by growth in protection and unit-linked products [9][25]. - Property & Casualty gross written premiums increased by 5% on a like-for-like basis, with BOP up 8% to $4.2 billion [12][29]. - Farmers delivered a BOP of $2.3 billion, maintaining the record level reached last year, with a combined ratio of 91.4%, significantly improved from 103.3% in 2023 [15][32]. Market Data and Key Metrics Changes - In retail, rates increased by 5% year-over-year, while the commercial book saw an overall rate change of 4% [12][29]. - EMEA Motor rates rose by 8% in 2024, indicating continued rate strength in the retail P&C segment [14][31]. - The SST ratio closed the year 2024 at 252%, reflecting strong capitalization [17][33]. Company Strategy and Development Direction - The company aims for a compounded annual growth rate of over 9% in core EPS from a base of $40.10 per share by 2027 [18][34]. - A global life protection unit was created to exploit further growth opportunities in the life insurance space [10][26]. - The company is focused on dynamic capital management and exploring growth opportunities before considering additional capital returns to shareholders [52]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the new financial cycle, having successfully completed the last three plans [3][6]. - The outlook for 2025 is positive, with expectations for resilient growth in both Life and P&C segments [17][33]. - Management noted that the consensus on P&C growth may not align with the company's expectations, indicating potential for upward adjustments [44]. Other Important Information - The company plans to increase the dividend by 8% to CHF 28, marking the seventh increase in the last eight years [8][24]. - The financial impact of the California wildfires is estimated at $200 million, but the company remains well-capitalized and profitable [11][27]. Q&A Session Summary Question: Farmers top line growth and PIF growth timeline - Management indicated that Farmers has seen an 8% decrease in PIF in 2024, but the pace of loss has decreased significantly in the second half of the year, with expectations for growth to resume in the second half of 2025 [39][41]. Question: Concerns about P&C growth and consensus alignment - Management believes that consensus estimates for P&C growth are not aligned with the company's plans, emphasizing the potential for higher growth rates [44]. Question: Capital return considerations and constraints - Management clarified that while there is no real constraint on SST, the focus remains on identifying better opportunities for capital deployment before considering additional returns to shareholders [49][52]. Question: North America rate outlook and claims inflation - Management noted that while rate increases are moderating, they continue to see rates above loss cost trends in various segments, particularly in property and motor [58][61]. Question: Retail recovery and combined ratio improvements - Management expects the retail combined ratio to improve as the market conditions stabilize and rates increase, with a target to return to mid-term combined ratios by 2027 [87]. Question: Liquidity walk and crop business update - Management explained that liquidity levels are influenced by M&A transactions and investments, with the crop business combined ratio slightly above 100% in 2024, but expected to improve [102][103].