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Zurich Says Its Well-Positioned to Outperform In Challenging Environment

Posted on 02 Dec 2010

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Zurich Financial Services Group (Zurich) at today’s Investors’ Day will provide updates on its three Business Segments (General Insurance, Global Life and Farmers) as well as its Group Operations function. In addition, the company will present an update on its capital management and Non-Core Businesses.

Commenting on the key messages for the day, Martin Senn, CEO of Zurich, reaffirmed, “Zurich’s aspiration is to become the best global insurer as measured by its shareholders, customers and employees.

"Zurich is well-positioned to outperform in a challenging environment. We believe that our agility, superior financial strength and strategic focus allow us to meet the industry challenges of low investment returns and new regulatory capital regimes.

"Our ability to generate cash is strong, supporting our policy to pay a sustainable and attractive dividend.

"We remain committed to our business operating profit after tax return on equity (BOPaT ROE) target of 16% over the medium term. The building blocks of our strategy remain unchanged and financial discipline is a core element. Our business model is straightforward, balanced and focused on providing insurance to help our customers understand and protect themselves from risk.

"Finally, we are accelerating our global approach to how we run our businesses. Central to this acceleration is intensifying The Zurich Way as our umbrella program for driving global capabilities to support growth and competitiveness of our customer-facing businesses.”

Today’s presentations will discuss the following Group targets:

Group overall:
    •    Paying a sustainable, attractive and competitive dividend
    •    Reaffirming business operating profit after tax return on equity (BOPaT ROE) target of 16% over the medium term
    •    Reducing total expenses (excluding commissions) by 5% or USD 500 million on a run-rate basis by 2013
    •    Accelerating release of USD 1.5 billion of capital from non-core run-off businesses by 2015

General Insurance:
    •    Improving combined ratio (CoR) by 3 to 4 percentage points relative to global competitors by 2013 while contributing to Group BOPaT ROE target: > 16%
    •    Reducing expenses (excluding commissions) by 7% or USD 350 million on a run-rate basis by 2013 (included in the USD 500 million Group target)
    •    Holding market position without compromising profitability

Global Life:
    •    Becoming a top 5 European-based global insurer by new business value (NBV) by 2013
    •    Generating 30% of NBV from Asia-Pacific & Middle East and Latin America by 2013
    •    Continuing to be cash generative while self-funding organic growth

    •    Maintaining top quartile growth performance amongst the 12 largest U.S. personal lines companies
    •    Continuing to increase market share for the Farmers Exchanges
    •    Improving retention at the Farmers Exchanges by 3 percentage points to close the gap relative to top-tier U.S. personal lines competitors