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Zurich Posts Strong Q1 Financial Results, Profits Up 76%

Posted on 06 May 2010

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Zurich Financial Services Group today reported another strong set of financial results for the three months ended March 31, 2010.

Zurich continued to achieve a robust operating performance, combining sustained profitability in its core business segments with strong growth at Global Life and Farmers. Although the first quarter was characterized by a high occurrence of weather and catastrophe-driven events, the diversified nature of the Group's global portfolio allowed Zurich to produce strong results.

First quarter performance highlights1 include:

*Business operating profit (BOP) of USD 1.3 billion, an increase of 19%. Annualized BOP ROE2 after tax of 13.5%

*Net income3 of USD 935 million, an increase of 76%. Annualized return on equity (ROE) of 13.2%

*Total Group business volumes, comprising gross written premiums, policy fees, insurance deposits and management fees, of USD 19.0 billion, an increase of 11% or 6% on a local currency basis

*Shareholders' equity of USD 28.2 billion, a 4% decrease over year end after deduction of the USD 2.2 billion dividend. Solvency I ratio up 17 percentage points to 212%

Commenting on the performance within the Group's three core business segments, Zurich's Chief Executive Officer Martin Senn said: "Our General Insurance business successfully maintained its focus on protecting profit margins, managing to absorb both the significant impact from the Chilean earthquake as well as the top-line pressures driven by reduced economic activity among our customers."

"Our Global Life business continued to show growth in all its key indicators for top and bottom line performance. This reflects the successful execution of our distribution and proposition-oriented strategy, coupled with a strong focus on expense management and risk margins."

"At Farmers, we continued to achieve strong operating margins, while increasing the surplus position of the Exchanges, which we manage but do not own, as a result of continued cost discipline and a strong contribution from the acquired 21st Century business."

Dieter Wemmer, Chief Financial Officer, added: "Contributing further to the strong operating performance are the continuous operational improvements embedded through The Zurich Way initiatives, which also underpin the ongoing successful integration process of our recent acquisitions in the U.S. and emerging markets."

"After paying a highly attractive and competitive dividend of USD 2.2 billion, our equity position continues at a strong level. Our book value per share increased by 10% to CHF 200.95, even after accounting for the gross dividend of CHF 16. Moreover, the Group's regulatory solvency margin improved by 17 percentage points to 212%, providing a desirable buffer going forward as we continue to observe persisting uncertainty regarding the macroeconomic environment."