(Reuters) – Zurich Insurance said on Thursday that it expects to exceed all of its financial targets for 2022, as it reported a double-digit increase in premiums in the first quarter, saying its losses from the Ukraine conflict are likely to be insignificant.
Zurich, Europe’s fifth largest insurance company, set three-year targets in November 2019, including raising the target for the business’ profit after tax on equity to more than 14% from the previous target of more than 12%.
“The positive operating trends during the first quarter, together with the Group’s very strong balance sheet, give us confidence that we will successfully complete the current strategic cycle later this year,”; said George Quinn, CEO of Finance and Economics in a statement.
Zurich’s Swiss solvency test ratio rose to 234% from 212% a year ago.
The insurance companies were hit by the covid-19 pandemic two years ago. But after ruling out the pandemic from many insurance companies and raising premiums, they have recovered.
In February, rival AXA SA raised its targets for 2023.
Zurich’s gross insurance premiums rose by 12% at comparable levels to $ 12 billion, with the help of interest rate hikes in commercial insurance.
Life insurance for new companies’ annual premium equivalents (APE) rose by 14% at comparable levels to $ 1 billion.
Jefferies analysts said the results showed “impressive revenue growth”, and reiterated their “hold” rating on the stock. Zurich’s share fell 0.18% but was one of the best performances in the blue-chip SMI index.
Zurich said its direct exposure to Russia and Ukraine through its P&C operations and investment portfolio was expected to be “insignificant”.
Many insurance companies have suffered losses from the war in Ukraine, and more are expected to develop.
Swiss Re said last week that it had set aside $ 283 million in reserves for the war.
CEO Mario Greco told Reuters earlier this year that Zurich plans to sell its portfolio of German life insurance policies that are closed to new customers, after selling its Italian life and pension book to the Portuguese insurance company GamaLife.
Mr. Quinn said in a media interview on Thursday that he hoped to be able to say more about the insurance company’s back book plans “before the year is over”.