Zurich Insurance Reports 35% Increase in 2021 Operating Profit to $5.7 Billion

Zurich Insurance is likely to see continued revenue and profit growth in the next two years, its chief financial officer said on Thursday, after the insurer reported its biggest annual profit since the financial crisis.

Insurers were gloomy about the outlook for the industry when the coronavirus outbreak took hold in early 2020. But they have remained profitable after excluding COVID-19 from many policies and raising premiums.

Zurich Insurance, Europe’s fifth-largest insurer, reported a 35% increase in 2021 operating income to $5.7 billion, its highest level since 2007, helped by a strong showing from its commercial business and reduced claims from COVID-19. It said it expected to meet or exceed its 2022 financial targets.

Operating profit was forecast at $5.5 billion, according to a company-compiled consensus forecast.

“You see growth in both revenue and earnings,” Chief Financial Officer George Quinn told a media call.

“It will continue through 2022 and I expect at this stage it will continue at least in 2023.”

Its shares were up 2.1% in pre-market trade.

Zurich set out three-year targets in November 2019, including raising its target for business operating profit after tax return on equity to more than 14% from the previous goal of more than 12%. Return on equity came in at 14% for 2021.

Quinn said the insurer planned to sell more books of life insurance which are closed to new customers, after it said last month it would release about $1.2 bllion of capital by selling its Italian life and pensions back book to Portuguese insurer GamaLife.

Zurich has also previously said it plans to divest some of its German back books. Zurich operates its German life insurance business under the Deutscher Herold brand.

Net income attributable to shareholders rose 36% to $5.2 billion, the highest since 2007.

Zurich proposed a dividend of 22 Swiss francs per share, a rise of 10% on the previous year.

(Reporting by Carolyn Cohn; editing by Michael Shields and Carmel Crimmins)

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