Zurich Insurance Group AG said it is fully on track to exceed all of its 2017-2019 financial targets as it reported a 14% year-over-year increase in first-half net income.
The group's after-tax net income attributable to shareholders came in at $2.04 billion, compared to the year-ago $1.79 billion. EPS was CHF13.67, up from CHF11.57 a year ago.
First-half business operating profit was up 16% year over year to $2.82 billion, driven by the underlying growth across the business and the strong underwriting performance of its property and casualty insurance business, which saw a 46% yearly increase in business operating profit to $1.66 billion.
Gross written premiums and policy fees for the P&C insurance segment reached $18.56 billion, compared with the year-ago $18.54 billion. The P&C combined ratio improved to 95.1% in the first half from the year-ago 97.5%, which the group said is the lowest it had reported in the past decade.
The life insurance segment reported first-half business operating profit of $701 million, down from $760 million a year earlier. The decrease is attributed to the strengthening of the U.S. dollar compared to the prior-year period. The segment's underlying growth in Europe, the Middle East and Africa and its reduced loss in North America had offset the decline in Latin America and Asia Pacific business. Gross written premiums, policy fees and insurance deposit for the life insurance segment were $18.10 billion in the first half, a 7% increase from a year earlier.
The Farmers business reported first-half business operating profit of $866 million, up 7% from $808 million in the previous year, helped by favorable performance in Farmers Management Services and Farmers Life. Gross written premiums for the business were $10.46 billion, compared with $10.34 billion in the prior-year period.
The group's estimated Zurich Economic Capital Model ratio is slightly above the 100% to 120% target range at 121% at the end of June, compared to 124% at the end of December 2018.
Its annualized business operating profit ROE was 15.0% in the first half, exceeding its target of above 12%. Cumulative cash remittances for the 2017 through June 2019-end came in at $9.2 billion and are on track to surpass the target of $9.5 billion by 2019-end.
The group added that it achieved net cost savings of $1.3 billion, with the balance of the $1.5 billion target expected to be delivered in the second half.