Zurich Insurance Group Ltd

Thank you very much. Good afternoon, everybody, and welcome to Zurich Insurance Group's first quarter 2024 results Q&A call. On the call today is our Group CEO, Mario Greco, and our Group CFO, Claudia Cordioli. I will hand over to Claudia for some introductory remarks, and then Mario will lead the Q&A session. Just a reminder for Q&A, we'd ask you to keep to a maximum of two questions, please. Claudia.

Thank you, John. Good afternoon, everyone. Thank you for joining us, also from my side. I'm Claudia Cordioli, Group CFO, and it is my pleasure to take you through our high-level results for the first quarter of 2024. I look forward to meeting you all over the coming weeks and months. Before Mario and I take your questions, I would like to share a few remarks. We made an excellent start to the year, with strong growth across all businesses. This is clear evidence to me of the strength of our unique diversified business model, and our relentless focus on execution to deliver on our commitments. Now, let's look at each of the businesses in turn, starting with P&C. Here, we continue to see robust top-line growth with insurance revenue up 12% like-for-like on the prior year, supported by rate increases in both retail and commercial. Retail P&C showed double-digit growth in insurance revenue, which together with rate increases of 7% in motor, and the impact of various known rate actions, notably in some of our key European motor portfolios, gave us great confidence in the outlook for the rest of the year. In commercial, North America continues to see strong rate momentum, with overall rate increases of 8%, and commercial auto, in particular, seeing rates up 14%. The dynamics in U.S. crop commodity prices with corn and soybean prices down about 15% to 20%, will drive a reduction in top line for this business for the year, which we expect, however, to be compensated by profitable growth in other lines. Margins in commercial insurance remain at very attractive levels, with a stable outlook as reinforced by the information we have from April renewals. Now, moving to our life business. we have delivered excellent growth, with revenues up 12% in the fee business and 11% in the protection-focused short-term business. Both these segments, as you know, have been very consistent sources of growth for us and account for a significant part of our life profits. For the CSM-accounted business, new business premiums were broadly flat compared to a year ago, while a more attractive portfolio mix has delivered an increase in the margin. Last but not least, farmers. Farmers had an excellent quarter, with farmers' management services seeing underlying fee income up 6% year on year. We are well on track to meet or exceed the guidance of mid-single-digit growth for the year. The management actions that were taken by the farmers' exchanges have been very effective, as evidenced by the outstanding underwriting performance. with a second consecutive quarterly combined ratio below 90%, and a strong improvement in the surplus position, which is now in the middle of the target range. This is clear evidence that farmers are on the right trajectory and are a true differentiator for Zurich. Our capital position remains very strong, with an SST ratio of 232%. As we announced in February, we will be undertaking a share buyback, which will start in the next few weeks. So in summary, an excellent start to 2024 and a great set of first results for me to share with you. With that, Mario and I will be happy to take your questions. Thank you.

We'll now begin the question and answer session. Anyone who wishes to ask a question or make a comment may press star and one on their touch-tone telephone. You will hear a tone to confirm that you've entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. kindly limit yourself to two questions only. Anyone who has a question or a comment may press star and one at this time. The first question comes from Hutner Michael with Bernberg. Please go ahead, sir. Mr. Hutner, your line is open.