Zurich Insurance Group Ltd

Ladies and gentlemen, welcome to the Zurich Insurance Group Half Year Results 2020 conference call. I am Sandra, the call school operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Richard Burton, Head of Investor Relations and Rating Agency Management. Please go ahead, sir.

Good morning, good afternoon, everybody. Welcome to Zurich Insurance Group's first half 2020 results Q&A call. On the call today is our Group CEO, Mario Greco, and our Group CFO, George Quinn. When we come to Q&A, we kindly ask you to keep to a maximum of two questions, and if we have time, we will come back to additional questions later in the call. But before we start with the Q&A today, Mario will just make some introductory remarks to the results. Over to you, Mario.

Thank you, Richard. Good afternoon. The first half of 2020 has been an unprecedented period with unforeseeable events ranging from a global pandemic and recession to civil unrest and higher rates of natural catastrophes. Throughout this period, our priority has been to support our customers and local communities while ensuring the safety and well-being of our colleagues with this being rewarded with increased levels of customer satisfaction and employee engagement. The pandemic will have lasting effects. And from the start of the crisis, we are focused on understanding these and adapting our thinking to ensure that we can continue to drive the business forward and deliver on the plans presented last November. The business developed well in the first six months of the year in spite of all these uncertainties. In property and casualty, our commercial business reported the strong growth following the improvements made to the portfolio in recent years, with our commercial businesses seeing stronger development than similar businesses at our peers. We are in a strong position to benefit further from both the improved pricing environment and the restructuring taking place at peers. Pricing improvements have continued to broaden out across geographies and business lines over the first half of the year, and we expect them to continue throughout 2021. In May, we told you that we expected $750 million of property and casualty claims for the full year related to COVID-19. And unlike for many others, this number remains unchanged and has been fully reflected within our first half results. In our retail business, our investment in digitalization has paid off, with our business remaining very resilient. The further falls in investment yields over recent months has increased the pressure on more traditional life business models, and confirms that our strategy of focusing on protection business and capital light savings products ready for over a decade is a correct one. Our key distribution channels have seen a steady recovery in sales activity over the most recent months, and we're optimistic for an improved second half performance of our live business. Over the first half, the farmers' exchanges continued to support their customers, refunding $300 million in respect of lower frequency observes during lockdowns. Although this came at a short-term cost to the results of farmers' management services, I am confident that by earning customers' trust, farmers will benefit in the longer term. Our balance sheet remains very strong, providing us with the significant flexibility to fully take advantage of the growth opportunities presented by improved commercial pricing and the retrenchment by some competitors, as well as growth in more digital retail business. While the operating environment has seen changes, our goals remain unchanged. And I am confident in the strength of our business our strategy, and our ability to adapt to changing circumstances. Thank you for listening, and now we're ready to take your questions.