Zurich Insurance Group Ltd

Good morning, good afternoon everybody, and welcome to Zurich Insurance Group's first quarter results Q&A call. On the call today is our Group CFO, George Quinn. But before I hand over to George for some introductory remarks, just a reminder for the Q&A, we kindly ask you to keep to a maximum of two questions, as we know that some of our peers also have calls straight after us today. So with that, I'd like to just hand over to George for some introductory remarks.

Richard, thanks very much and good morning and good afternoon everyone. Thank you for joining us on what I know is a very busy day for all of you. As you've seen from this morning's press release, the group's made a very strong start to the year. We've got good growth across all the businesses and it's important to remember that this is against a prior year quarter that was largely unimpacted by the pandemic. The performance demonstrates, we believe, both the strength of the business and the successful positioning of the group to take advantage of growth opportunities as the world emerges from the challenges of the global pandemic. In the first quarter, our P&C business contained to perform well with top line growth of 14%. driven by the strength of commercial insurance. Pricing momentum in commercial insurance remains strong. All regions are seeing higher levels of price increase in the first quarter than you saw a year ago, and we expect the current pricing conditions to continue through this year and to next, supporting further improvement in the underlying accident-year loss ratios. Life and the farmers' businesses have also performed well, with a focus on unit-linked and protection products leading to strong growth in new business value. And while the Farmers Exchange, which are, of course, owned by the policyholders, saw a return to growth even before the inclusion of the acquired MetLife P&C business, which will add to growth from the second quarter. Balance sheet remains very strong with the solvency test ratio, and this allows for the acquisition of the MetLife P&C business, even if it didn't close. in the first quarter, 201%, well above the target levels that we communicated back in February. Before I give you some thoughts about the remainder of the year, I just want to comment that there's been no change to the level of COVID-19 P&C claims net of frequency benefit. So this remains at the $450 million net figure level that we reported back in February. Looking ahead, it seems clear to me that given the strength of the first quarter that we were perhaps a little cautious in our guidance for the P&C net and premium growth. If you remember, Richard and I stretched the definition of mid-single digits, and I think we would now say that it's more likely to be in the upper single-digit range compared to what I'd indicated back in February. On the claims side, you'll have seen in the press release that we've got a higher than usual level of NACAT events in the first quarter primarily the Texas freeze and so assuming that all things are equal only we have the usual NACAT experience for the remainder of the year that would add about one percentage point to the combined ratio overall and for the year and life the first quarter so Some additional mortality, a level that was similar to the second half of 2020 with about $120 million driven primarily by the UK, US and Latin America. Mortality has been improving steadily as the lockdown measures and the successful rollout of vaccination programs has led to significant improvements. And that's particularly true in the UK and the US. To look ahead for a second, I think the strength of the first quarter trends and the continuing improvement in the underlying P&C margins gives me and all of us great confidence as we look out to the remainder of the year. With that, I'll be happy to take your questions.

The first question comes from the line of John Hocking with Morgan Stanley. Please go ahead.