(Bloomberg) -- Zurich Insurance Group AG sees fourth-quarter losses related to Hurricane Michael of roughly $175 million and continues to target improvements in profitability in its North American business, according to a statement on Thursday.
- Gross written premiums in the insurer’s Property & Casualty unit were flat at $25.87 billion and rose 2 percent in dollar-terms as Zurich continues to target profitability over volumes.
- Growth in Asia Pacific and Latin America was partially offset by planned actions to boost profitability in North America.
- Boosting profitability for instance means shifting capital from larger commercial clients to SMEs, said Chief Financial Officer George Quinn.
- Weather and natural catastrophe losses over the first nine months were slightly above expected levels, Zurich said in the statement.
- Zurich Insurance sold its business in Venezuela and said it may recognize a negative non-cash currency translation adjustment of around $258 million.
- The sale will have an impact on net income but not operating profit next year. Quinn dubbed Venezuela a troubled market and said it has substantial size; no word on buyer
- Charge will have no impact on the group shareholders’ equity or Z-ECM capital position.
- Zurich says insurance rates rose about 3 percent over the reporting period.
- Premiums in the insurer’s life segment came in 25 percent higher on a like-for-like basis at $3.6 billion; consensus for full year is $5 billion. Life premiums benefited from the sale of the U.K. workplace savings business.
- Farmers Exchange posted gross written premiums of $15.5 billion, a 2 percent increase in dollars.
- The insurer’s solvency ratio Z-ECM stood at 134%; consensus full year estimate 135%
- “In Property & Casualty, we continue to focus on profitability over volumes in what remains a challenging environment. We have also continued to execute on our strategy with the announced acquisition of Adira Insurance in Indonesia and the integration of the acquired QBE businesses in Latin America,” said Quinn
- A flurry of profit warnings from RSA, Lancashire Group and Talanx, combined with the more general market selloff, has been weighing on European property and casualty insurance shares.
(Updates with comments by executives.)
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