Zurich Insurance reports 6% P&C revenue growth despite catastrophe losses

Investing.com — Zurich Insurance Group (SIX:ZURN) reported a 6% increase in its Property & Casualty (P&C) insurance revenue for the first nine months of 2024, marking steady growth despite a challenging market landscape.

The company reported $160 million in claims from Hurricane Helene and $200 million from Hurricane Milton. While significant, these losses are in line with industry averages

The North American division, a major contributor to P&C revenues, posted a 6% rise in premiums, driven by rate increases. 

However, there was a drag that came from the U.S. crop insurance segment. 

Falling commodity prices shaved $500 million off premiums, reflecting the direct impact of market volatility on the insurance pricing mechanism. 

“In our view, this is of no consequence and thus the ex-crop growth figures are more meaningful,” said analysts at Jefferies in a note.

Regional performance varied, with Latin America leading the pack in P&C growth at 14% on a like-for-like basis, followed by Asia Pacific at 9%. 

The European market also delivered an 8% increase, underscoring the breadth of Zurich’s growth across key geographies. 

Meanwhile, North America was flat but showed a 3% rise when crop insurance was excluded, aligning with the group’s broader growth trends.

Zurich’s performance in catastrophe-prone areas remained under scrutiny, with Morgan Stanley (NYSE:MS) analysts pointing out that higher-than-expected losses from natural disasters weighed on overall earnings. 

The group’s catastrophe loss ratio stood at 3.4% for the nine-month period, surpassing initial expectations.

Despite these challenges, Zurich’s focus on underwriting discipline and portfolio optimization has allowed it to maintain profitability. 

Farmers Exchanges, another key component of the group, reported a combined ratio of 93.5%, underscoring strong underwriting performance.