Zurich Insurance Group Ltd

Good afternoon, everybody, and welcome to Zurich Insurance Group's first half 2022 results Q&A call. On the call today is our Group CEO, Mario Greco, our Group CFO, George Quinn. Before I hand over to Mario for some introductory remarks, just a reminder for the Q&A, we kindly ask you to keep to a maximum of two questions. Mario.

Thank you, John. Good afternoon from my side. As you heard, George and I We're here to answer your question, but before that, let me provide you with a few remarks on the results. So this morning we reported our highest first half business operating profit since 2008, and the second highest ever. We have achieved this despite unprecedented market conditions driven by the war in Europe, higher inflation, and the lingering effect of the pandemic. Zurich is performing very strongly across all of our businesses, and we remain on track to beat all of our financial targets for the second successive strategic cycle. Today, we have announced a 1.8 billion Swiss franc share buyback to offset the earnings per share impact of our German Life Back Book SAID. While the primary goal of the transaction is to reduce capital volatility, The portfolio has been a reliable contributor of earnings. Given it's now possible to immediately redeploy capital to offset this loss of earnings, the buyback will allow us to protect shareholders from any dilution. Our capital position is very strong, and this underpins the promises that we make every day to our customers, distributors, and regulators. We continue to focus on customer needs, transforming Zurich into a leaner more agile insurer that's primed for the future. Results continue to be seen in our growing customer numbers, with more than 850,000 customers added in the first half of the year. In property and casualty, we continue to see the benefits of consistent, disciplined, proactive portfolio management. PNC business operating profit rose 32% to $2.1 billion U.S., driven by a record low combined ratio of 91.9%, as the benefit of recent price increases continue to earn a throw into our underwriting results. The gross return premiums also grew by 13% on a like-for-like basis, with strong growth achieved in both commercial insurance and retail. In commercial insurance, a rate increases of 9%, were stable compared to the first quarter. We continue to see rate increases remaining ahead of lost cost trends into 2023. For life, our consistent focus on protection and unit linked continues to pay off with another excellent set of results. Life business operating profit in the first half grew by 13%. despite unfavorable currency movements due to the strength of the US dollar. This was driven by underlying growth and a much reduced level of COVID claims versus last year. The strategic actions we have taken in Italy and Germany this year further improved the industry-leading capital efficiency of our business, and we are well positioned for future success. Gross written premiums of the farmers' exchanges increased by 15%, driven by the inclusion of the midlife business for a full six-month period and underlying organic growth. Overall, farmers' SPOC also increased by 15% over the prior year period. Sustainability continues to be a key focus for us, and we're pleased to see that this continues to be recognized externally with MSCI recently upgrading our ESG rating to AAA, the highest possible category, of course. On September 27, George will be hosting a webcast where we will explain to you how we're implementing the new IFRS 17 framework at Zurich. Beyond this, I also look forward to seeing many of you in Zurich in November. when we will set out our ambitions for our next strategic cycle. We're confident that Zurich is well-placed to lead the transformation of the industry with sustainable products and services adapted to the rapidly changing expectation of our customers. Thank you for listening, and Giorgio and I are now ready to take your questions.

The first question comes from Wilhel Castel from UBS. Please go ahead.