Zurich Insurance sees $550 million impacted by Hurricane Ian, on track to beat targets

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  • Zurich cuts appetite for natcat risk-CFO
  • New goals likely to be tougher-CFO
  • Share buyback to begin in Q4-CFO
  • Stocks down 1%, underperforming European insurance

ZURICH/LONDON, November 10 (Reuters) – Zurich Insurance Group (ZURN.S) expects a net hit of $550 million before tax from Hurricane Ian, Europe’s fifth-largest insurer said on Thursday, although it remains on track to beat its 2020-2022 financial targets, helped by the rise premium rates.

Insurers face potential losses of up to $60 billion from Hurricane Ian, which tore through Florida and the Carolinas in September in what could be the second-largest natural disaster in US history. United.

Climate change contributes to increased losses from natural disasters for insurers, and some of them are giving up covering the risk, especially in areas prone to hurricanes or wildfires.

“I would like to take (Hurricane Ian) as an isolated case, but I’m not sure that’s the case,” chief financial officer George Quinn told Reuters, adding that natural disasters were likely to become more severe and more frequent.

“We will continue to limit our appetite for natural disaster risk.”

Zurich sees its overall catastrophe loss ratio for the first nine months about two percentage points above long-term trends.

Zurich is hosting an Investor Day next week where it will set its 2023-2025 goals. Quinn said targets are likely to be tougher, after “robust premium increases” helped the insurer’s recent performance.

Zurich reported that property and casualty insurance premiums rose 8% to $33.5 billion in the first nine months, a gain of 13% on a like-for-like basis.

The insurer said the annual premium equivalent (APE) of new life insurance business fell 6% but rose 2% on a like-for-like basis that takes into account currency movements, acquisitions and disposals.

Zurich’s Swiss Solvency Test (SST) capital ratio was estimated at 252% as of September 30, down from 212% a year ago, a sign of greater capital strength.

Zurich shares were down 1% at 0840 GMT, underperforming European insurance stocks (.SXIP). KBW analysts pointed to a lower-than-expected equity ratio, reiterating their rating of “underperformance” on the stock.

Zurich announced a 1.8 billion Swiss franc ($1.83 billion) share buyback program during the half-year results, which Quinn said an earlier media call would likely be made in the fourth quarter.

($1 = 0.9979 euros)

($1 = 0.9856 Swiss francs)

Reporting by Michael Shields in Zurich and Carolyn Cohn in London, Editing by Miranda Murray

Our standards: The Thomson Reuters Trust Principles.

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