Insurers Zurich and Beazley upbeat after 2021 profits beat expectations in the face of Covid-19 gloom
- Zurich reported its biggest annual profit since the financial crisis in 2007
- Beazley turned its $50 million 2020 full-year loss into a $369.2 million profit
- Outlook for insurers looked gloomy when pandemic hit in early 2020
- they remain profitable after excluding Covid from policies and raising premiums
Insurers Zurich and Beazley were upbeat on Thursday after revealing that 2021 profits beat expectations.
Swiss firm Zurich Insurance reported its biggest annual profit since the financial crisis in 2007, with a 35 per cent increase in 2021 operating income to $5.7billion (£4.2billion) thanks to a strong showing from its commercial business and reduced claims from Covid-19.
Meanwhile London-headquartered Beazley, which specialises in marine, property, data breach and life insurance, turned its $50million full-year 2020 loss into a $369.2million profit before tax for 2021.
Swiss firm Zurich Insurance reported its biggest annual profit since the financial crisis in 2007, with a 35% increase in 2021 operating income to $5.7 billion
The firm achieved gross written premiums of $4.6billion, a 30 per cent rise from 2020 where they came in at $3.56billion.
Off the back of the results, the board announced the company will reinstate the dividend at 12.9p.
Commenting on the latest financial results, Beazley chief executive officer Adrian Cox said: ‘I’m delighted with Beazley’s performance in 2021 where we have delivered GWP growth of 30% and a combined ratio of 93%, which has resulted in a robust profit of US$369.2 million.’
Cox added that the company saw good growth across all of its lines of business but were ‘particularly encouraged by the opportunity in the cyber market’ where it continues to see ‘significant rate improvement’.
Zurich Insurance was similarly upbeat about its results.
It said it is likely to see continued revenue and profit growth in the next two years, and it expects to meet or exceed its 2022 financial targets.
Insurers have remained profitable after excluding Covid-19 from many policies and raising premiums
Operating profit was forecast at $5.5billion, according to a company-compiled consensus forecast.
‘You see growth in both revenue and earnings,’ Chief financial officer George Quinn told a media call.
‘It will continue through 2022 and I expect at this stage it will continue at least in 2023.’
Its shares were up 2.1 per cent in pre-market trade.
Zurich set out three-year targets in November 2019, including raising its target for business operating profit after tax return on equity to more than 14 per cent from the previous goal of more than 12 per cent. Return on equity came in at 14% for 2021.
Quinn said the insurer planned to sell more books of life insurance which are closed to new customers, after it said last month it would release about $1.2billion of capital by selling its Italian life and pensions back book to Portuguese insurer GamaLife.
Zurich has also previously said it plans to divest some of its German back books. Zurich operates its German life insurance business under the Deutscher Herold brand.
Net income attributable to shareholders rose 36 per cent to $5.2billion, the highest since 2007. Zurich proposed a dividend of 22 Swiss francs (£17.55) per share, a rise of 10 per cent on the previous year.
Insurers were gloomy about the outlook for the industry when the coronavirus outbreak took hold in early 2020. But they have remained profitable after excluding Covid-19 from many policies and raising premiums.