Global insurance and reinsurance giant Zurich has continued to receive strong support from its reinsurance and retrocessional capital partners in the first-half of 2021, ceding 10% more in premiums to them than the prior year period.
That continues the trend from 2020, when, as we reported Zurich ceded US $8.6 billion of property and casualty (P&C) premiums to reinsurance and retro partners over the full-year, which was 10% up on 2019.
In the first-half of 2021, Zurich has ceded almost $5.7 billion of premiums to its reinsurers, up 10% from the just over $5.2 billion ceded in the previous year.
Property and casualty (P&C) premiums ceded to reinsurers rose by 9% in the first-half of 2021, reaching $4.92 billion.
On the life side of Zurich’s underwriting, premiums ceded to reinsurers rose faster by 16%, to $702 million in H1 2021.
Part of the higher increase in life premiums ceded may have been due to the reporting of elevated COVID-19 mortality claims for the period.
On the P&C side, the company also noted that it experienced a high level of first-half natural catastrophe losses as well, with its P&C and Farmers Re reinsurance units in the US particularly affected.
Nat cat losses were around 3% above budget levels for the period, but still the combined ratio only came out at 93.9%, helping Zurich to a strong quarter of profit.
Catastrophe losses, excluding impacts from COVID-19, were US $438 million above normal levels, based on Zurich’s assumption of around 3.5 percentage points of catastrophes within the loss ratio, and US $413 million above prior year levels, the company explained.
Zurich’s results revealed a business operating profit of US $2.7 billion, up 60% which its Property & Casualty (P&C) combined ratio at 93.9% was the lowest reported in more than 20 years.
Reinsurance will be assisting with this improving combined ratio, as too will the rate increases Zurich is achieving, which the firm said today it expects will continue.
Group Chief Executive Officer Mario Greco commented, “We achieved outstanding results in the first six months of 2021 with profits back to the levels of 2019, when we reported our best first half in a decade. This is a remarkable achievement considering the elevated natural catastrophe losses in the period and the ongoing public health crisis.
“Our first-half performance is the result of the focused execution of our strategy, with contributions from all parts of the business. Our combined ratio in property and casualty insurance, now at its lowest in more than 20 years, is testament to the improvements made to underwriting since 2016.
“This year’s extreme weather events – from winter storms in the southern United States to the more recent flooding in South East Asia and Europe – underscore society’s vulnerability to the risks of climate change and the need for businesses to take action.”
On those more recent floods across Europe, Zurich provided some insight, saying that on the back of elevated natural catastrophes in the first-half, it anticipates nat cat losses of around 5 percentage points for the full year, taking into account an initial assessment of the impacts from the recent European flooding, as well as normal weather and cat losses over the rest of 2021.