Zurich Insurance profit beats estimates as Life growth offsets claims

Investing.com -- Zurich Insurance Group AG (SIX: ZURN) reported a stronger-than-expected rise in first-half net profit on Thursday, driven by robust growth in its Life business and resilient underwriting.

Zurich shares, however, fell 2.8%, touching their lowest level since June 29 and underperforming the broader SMI, which rose 0.6% in morning trade.

Net income attributable to shareholders rose to $3.5 billion in the six months ended June 30 from $3.1 billion a year earlier, beating the Visible Alpha consensus estimate of $3.45 billion by about 1.4%.

Business operating profit, Zurich's preferred earnings measure, climbed 13% to a record $4.8 billion, ahead of consensus of $4.57 billion, while core earnings per share increased 11.5% to $24.21.

The insurer also reported a core return on equity of 27.1% and an estimated Swiss Solvency Test ratio of 266%, comfortably above its 160% floor.

The Property & Casualty business posted a 16% increase in operating profit to $2.8 billion, supported by targeted premium growth and disciplined underwriting, while maintaining a combined ratio of 92.7%.

Life operating profit also rose 16% to $1.3 billion, with protection gross written premiums increasing 10%, exceeding the company's 2027 growth target trajectory.

Zurich reiterated that it is confident of meeting or exceeding its 2025-2027 financial targets, citing record first-half operating profit, strong capital generation and continued momentum across its insurance franchises.

Jefferies described the results as "remarkably close to consensus expectations," noting the biggest upside came from the Life division, where operating profit exceeded forecasts on stronger protection growth.

The brokerage said business operating profit beat consensus by 1.7%, while net income came in 0.3% above expectations, although part of the investment income upside reflected one-off capital gains.

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