Zurich’s results for the year ended 31 December 2011 demonstrate the continued focus towards long-term profitable growth.
- Transformation programme complete
- Net asset value per share up 7%
- International solvency margin strengthened from 51.6% to 67.7%
- Full year dividend of 300 cents per share
The results for the year have been impacted by a decline in business volumes of 16% to R3.9 billion (2010: R4.6 billion), offset by improved loss ratios and operational efficiencies. Ongoing management actions continue to focus on further improving profitability and growth.
Despite major weather-related losses in the first quarter of the year, the implementation of a number of claims initiatives has positively influenced the cost of claims which, at R2 billion, reflect a 23% improvement from R2.6 billion in the prior period.
“Having completed our business transformation, our primary focus for 2011 was to stabilise the business,“ remarked Zurich’s Chief Executive Officer, Guy Munnoch. “Whilst our top line income is below prior year, with the continuing improvement of our loss ratios, our underlying profit remains positive and this places us in a strong position for growth in 2012 and beyond.“
Expenses have been well controlled and reflect the benefits from the business transformation programme embarked on in 2010 together with additional initiatives undertaken in the year.
The general insurance result is a surplus of R142.8 million (2010: R190.2 million) and the underwriting result, which reflects a surplus of R62.3 million (2010: R94.8 million), is expected to be strengthened through the delivery of a focused growth strategy flowing through 2012.
Attributable investment income at R80.5 million (2010: R95.4 million) is down on prior year due to lower premium volumes and a declining interest rate environment. Despite this, profit before tax at R194 million is up by 1% on prior year.
Net asset value per share is up 7% from R155 to R165 and this improvement reflects in the strengthening of the international solvency margin from 51.6% to 67.7%. In addition, the Company has maintained its AA credit rating.
Having completed the business transformation programme and due to the underlying profitability and financial position of the Company, the Board has declared a final dividend for the year of 200 cents per share, bringing the total full year dividend to 300 cents. This is clear indication of the strength of the Company’s financial position and cash flow and reflects on a disciplined management team.
Munnoch concludes: “We have made good progress in 2011 – in addition to transforming our claims service from market lagging to market leading in areas such as Fast Track Claims, we also refreshed our Corporate proposition, bringing new capacity to the market. From a product and proposition perspective, we were pleased to be able to launch our new Farmers product at the end of the year and have already started looking at new opportunities for 2012, such as in the Financial Lines area.”
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Note to editors
Zurich Financial Services Group (Zurich) is a leading multi-line insurance provider with a global network of subsidiaries and offices in Europe, North America, Latin America, Asia-Pacific and the Middle East and Africa as well as other markets. It offers a wide range of general insurance and life insurance products and services for individuals, small businesses, mid-sized and large companies as well as multinational corporations. Zurich employs about 60,000 people serving customers in more than 170 countries. Founded in 1872, the Group is headquartered in Zurich, Switzerland. Zurich Financial Services Ltd (ZURN) is listed on the SIX Swiss Exchange and has a level I American Depositary Receipt program (ZFSVY) which is traded over-the-counter on OTCQX. Further information about Zurich is available at www.zurich.com.
Zurich in South Africa is a short-term insurance company headquartered in Johannesburg and listed on the Johannesburg Stock Exchange. Founded in 1965, it offers insurance products and services that respond to the needs of individual, commercial and corporate customers. It has a network of sales areas and a series of service outlets across the country, and employs approximately 750 people. In addition, it has subsidiaries locally as well as in Botswana.