Zurich Insurance Group Ltd

Ladies and gentlemen, welcome to the Zurich Insurance Group Q3 Results 2023 conference call. I am Shari, the course call 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 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. John Hocking, Head of Investor Relations. Please go ahead.

Thank you and good afternoon, everybody, and welcome to Zurich Insurance Group's nine-month 2023 results Q&A call. On the call today is our Group CFO, George Quinn. Before I hand over to George for some introductory remarks, just a reminder, when we get to the Q&A session, if you could keep the two questions each, that would be much appreciated. Thank you.

Thanks, John, and good afternoon, everyone. Thank you for joining us. Before we get to the questions, I just want to make a few initial remarks. The farmers' exchanges continue to take the proactive steps that are necessary to improve underwriting outcomes and rebuild the surplus position of the exchanges. And we see early signs that the impact of underwriting actions and the achieved rate earning through are having the desired impact on the combined ratio. The exchanges' XCAT combined ratio declined for the fourth consecutive quarter, and looking forward, the continued impact of underwriting action exposure management, additional rate filings, and expense reductions should further accelerate progress. We've also announced this morning the acquisition of three brokerage entities and the flood servicing program from the exchanges. From a Zurich perspective, the transaction brings an additional capital light turning stream, which is expected to grow quickly as the exchanges execute on plans to provide enhanced choice for their customers and increase revenue opportunities for their agents. The acquisition will also boost the exchanges surplus position by a bit more than three points. Next week at the investor update in London, there'll be an opportunity to meet with the farmers management team and discuss the plans in more detail. Zurich's capital strength and the financial flexibility that it affords us are signatures of the group. The nine-month SST ratio of 266% is broadly flat on last quarter. We remain more than 100 points above our capital floor of 160%. Given the de-risking that we've undertaken and the continued exceptional capital levels, we've announced today that we expect to supplement the year-end dividend with a buyback. On P&C, our longstanding focus on gross underwriting and volatility management continues to positively impact our results. In particular, the proactive steps we've been taking since 2021 to reduce cat exposure are having the desired effects. Cat activity in Europe in particular has been elevated in the third quarter, and although the U.S. has not seen any significant individual events, we've seen a steady stream of smaller claims. Despite this, we are confident that the group is on track to end the year within the annual CAT guidance of 2.5 to 3 points of insurance revenue. In commercial, we've seen another quarter of positive rate momentum, with US property in particular continuing to see high teens rate increases. In aggregate, rate increases are exceeding lost cost trends. In retail P&C, we remain focused on some of the European motor portfolios, where, as we've commented before, we expect to put through further rate increases before target returns are reached. This is tracking very much as we expected. Life has had a very strong quarter, with strong new business growth up 23%, and a welcome rise in the new business value added in CSM. With that, I'd be happy to take your questions.