Zurich Insurance Group Ltd

Good afternoon, everybody, and welcome to Zurich Insurance Group's full year 2024 results Q&A call. On the call today is our group CEO, Mario Greco, and group CFO, Claudia Cordioli. 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, please. Mario, over to you.

Thank you very much, Mitch, and good afternoon, everyone, and thank you. for joining us today and for your continuing interest in Zurich Insurance Group. Before Claudia and I will take your questions, I'd like to provide you with a brief overview of our financial year. This has been an excellent year for the group, with the results outpacing our original 2023-2025 financial plan. And in turn, this lays a strong foundation for our ambitious 2027 financial objectives which we presented at our recent investor day. We approached this new financial cycle confidently, having now successfully navigated our last three plans. Now I'd like to draw your attention to three significant achievements in our 2024 results. A record group up of $7.8 billion, up 5% year over year, reflecting strong business momentum. We generated a core ROE of 24.6%, an increase of 1.6 percentage points from 2023, demonstrating our ability to allocate capital efficiently to high return opportunities. And lastly, healthy cash remittances of $7.1 billion further reflects high cash conversion on EAS earnings up 34% in the year, and ongoing dynamic capital management. This strong performance and positive outlook support our proposal to the Board and the AGM to increase the dividend 8% to 28 Swiss francs, the seventh increase over the last eight years. Now, turning briefly to the individual business segments, allow me to start with life. LifeBob grew 9% like-for-like to a record $2.2 billion, driven by growth in protection and unit linked. LifeGross premiums and new business premiums grew 4% and 5% respectively on a like-for-like basis. Protection, which drives approximately 60% of our life profits, continued to grow strongly. Here, we experienced 7% like-for-like gross premium growth with strong contribution from EMEA, Asia Pacific, and Latin America. To exploit further growth opportunities in this space, a global life protection unit was created as announced at our Ambassador Day last November. Now on property and casualty. First, let me make a comment on the California wildfires. Zurich is committed to supporting our impacted customers at this challenging moment. This latest event further evidences the value of the protections we provide. The financial impact of Zurich Insurance is estimated $200 million, including Farmers' Free. You will have seen the separate comment from the farmers' exchanges pointing to an estimated loss which falls well within their insurance coverage. For both, Zurich and farmers, the wildfire losses are set against the backdrop of strong capitalization and profitability, well positioned for future growth. Now let me turn to the broader property and casualty business. We continue to grow the property and casualty business with gross return premiums up 5% on a like-for-like basis. In retail, rates increase 5% year over year, while the commercial book saw an overall rate change of 4%. Importantly, absolute profitability remains strong with a 94.2% combined ratio and bop up 8% to 4.2 billion. In both commercial and retail, the accident-year XCAT combined ratio showed year-over-year improvements to 92% and 97% respectively. Our discipline reserving approach remains evident with positive prior year reserves developments at the 1.6 percentage points. Looking ahead, we observe ample opportunity to grow at attractive levels of return. In retail P&C, where EMEA motor rose 8% in 2024, for example, we anticipate continued rate strength. Similarly, in commercial, we expect a positive rate momentum to persist across our portfolio, compensating for factors such as ongoing loss trends. And let me close now with farmers. In 2024, farmers delivered a healthy bulk of $2.3 billion, in line with the record level reached last year. Fundamental improvement in farmers' exchanges continued at pace through the year. Management actions on rate expense controls and, importantly, insurance exposures contributed to a full year combined ratio of 91.4%, materially lower than the 103.3% recorded in 2023. Additionally, the surplus ratio ended the year at 42.4%. enabling the exchanges to focus on measures to achieve sustainable growth going forward. And now looking into the future, we entered 2025 with a resilient balance sheet and with strong capitalization. The SST ratio closed the year 2024 at 252%. This solid financial position combined with continued rate momentum in PNCs sustained growth initiatives in our live business, and significant financial improvements of farmers' exchanges puts us in a strong position to deliver attractive shareholder returns and durable growth during the next phase of our financial cycle. Over the next three-year cycle to 2027, we aim for compounded annual growth rate over 9% in core EPS from a base in 2024 of 40%. $1.1 per share, a core ROE above 23%, cash remittances exceeding $19 billion cumulatively. With that, thank you for listening, and Claudio and I are now ready to take your questions.

Thank you, Mario. We'll now take your questions. As usual, everybody, please keep to a maximum of two questions. Thank you, operator.