Most readers would already know that Zurich Insurance Group’s (VTX:ZURN) stock increased by 5.7% over the past three months. Since the market usually pay for a company’s long-term financial health, we decided to study the company’s fundamentals to see if they could be influencing the market. In this article, we decided to focus on Zurich Insurance Group’s ROE.
ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In simpler terms, it measures the profitability of a company in relation to shareholder’s equity.
The formula for return on equity is:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders’ Equity
So, based on the above formula, the ROE for Zurich Insurance Group is:
24% = US$6.3b ÷ US$26b (Based on the trailing twelve months to June 2025).
The ‘return’ is the yearly profit. One way to conceptualize this is that for each CHF1 of shareholders’ capital it has, the company made CHF0.24 in profit.
Check out our latest analysis for Zurich Insurance Group
So far, we’ve learned that ROE is a measure of a company’s profitability. Based on how much of its profits the company chooses to reinvest or “retain”, we are then able to evaluate a company’s future ability to generate profits. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don’t necessarily bear these characteristics.
First thing first, we like that Zurich Insurance Group has an impressive ROE. Secondly, even when compared to the industry average of 18% the company’s ROE is quite impressive. This probably laid the groundwork for Zurich Insurance Group’s moderate 6.4% net income growth seen over the past five years.
Next, on comparing Zurich Insurance Group’s net income growth with the industry, we found that the company’s reported growth is similar to the industry average growth rate of 5.6% over the last few years.
SWX:ZURN Past Earnings Growth December 18th 2025
Earnings growth is a huge factor in stock valuation. It’s important for an investor to know whether the market has priced in the company’s expected earnings growth (or decline). By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Is ZURN fairly valued? This infographic on the company’s intrinsic value has everything you need to know.
The high three-year median payout ratio of 90% (or a retention ratio of 10%) for Zurich Insurance Group suggests that the company’s growth wasn’t really hampered despite it returning most of its income to its shareholders.
Additionally, Zurich Insurance Group has paid dividends over a period of at least ten years which means that the company is pretty serious about sharing its profits with shareholders. Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 76%. As a result, Zurich Insurance Group’s ROE is not expected to change by much either, which we inferred from the analyst estimate of 23% for future ROE.
Overall, we are quite pleased with Zurich Insurance Group’s performance. Especially the high ROE, Which has contributed to the impressive growth seen in earnings. Despite the company reinvesting only a small portion of its profits, it still has managed to grow its earnings so that is appreciable. On studying current analyst estimates, we found that analysts expect the company to continue its recent growth streak. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.