Zurich Says Europe Storms Drove Catastrophe Losses

Zurich Insurance Group AG said it saw elevated natural catastrophe losses in its property & casualty business in the third quarter, following storms in Germany, Italy and Switzerland.

The natural catastrophe loss ratio in the unit rose to 3.2% in the nine months to September, from 1.4% a year earlier, the Swiss insurer said in its third-quarter trading update on Thursday.

The period was marked by weather events in Europe including hailstorms and heavy rain, which drove property, vehicle and infrastructure claims. An earthquake in Colombia also contributed to the jump.

Zurich said pricing trends in its property and casualty business are moderating, amid slowing premium increases across the industry. Gross written premiums in the business rose to $42.1 billion, on a like-for-like basis a 7% increase compared to the previous year. Slower rate increases in the large-property business weighed on commercial insurance, Zurich said.

In the life business, gross written premiums gained 3% with protection and unit-linked businesses seeing strong premium growth. Farmers Exchanges saw a 4% increase in dollar terms.

Analysts at Jefferies said that the rate changes “positively surprised as prices are still up or flat” despite momentum slowing in some areas such as U.S. commercial.

Shares were up 1.2% at 9:43 a.m. in Zurich.

In October, Zurich completed its $11 billion acquisition of specialty insurer Beazley Plc., a deal it said would create the world’s largest specialty insurer with about $15 billion of gross written premiums. The Swiss firm said the deal would also help it leverage Beazley’s presence in the Lloyd’s of London market.

The deal had sparked some concern that expert underwriters at the London-based firm would leave rather than be absorbed into the larger firm.

Chief Executive Officer Mario Greco said on a media call Thursday that so far there had been “very little turnover at Beazley,” which in a normal year is 10% for underwriters. Although retention bonuses are being paid, Greco said that it is not just about the money but the opportunities and possibilities offered to them.

The firm said it will provide an update on the integration of Beazley at its investor day on November 17.

Top photo: The period was marked by weather events in Europe including hailstorms and heavy rain, which drove property, vehicle and infrastructure claims. Photographer: Alessandro Della Bella/Bloomberg.