{"id":112551,"date":"2026-08-07T00:34:10","date_gmt":"2026-08-07T00:34:10","guid":{"rendered":"https:\/\/www.europesays.com\/ch\/112551\/"},"modified":"2026-08-07T00:34:10","modified_gmt":"2026-08-07T00:34:10","slug":"zurich-insurance-group-ag-zfsvf-q2-2026-earnings-call-highlights-record-profits-and","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ch\/112551\/","title":{"rendered":"Zurich Insurance Group AG (ZFSVF) (Q2 2026) Earnings Call Highlights: Record Profits and …"},"content":{"rendered":"\n

This article first appeared on GuruFocus<\/a>. <\/p>\n

Business Operating Profit: Increased 13% to $4.8 billion. <\/p>\n

Core EPS: Grew 11.5%. <\/p>\n

Property & Casualty Gross Written Premiums: Grew 7% to nearly $30 billion. <\/p>\n

Property & Casualty Operating Profit: All-time high of $2.8 billion, up 16% year on year. <\/p>\n

Property & Casualty Combined Ratio: Excellent at 92.7%. <\/p>\n

Commercial Specialty Premiums: Up 8% with an underlying combined ratio of 91.2%. <\/p>\n

Construction Premiums: Grew 18%. <\/p>\n

Middle Market Premiums: Up 7%. <\/p>\n

Nat Cat Losses: Remained low at 1.9% of combined ratio. <\/p>\n

Prior-Year Development: Contributed 2.4 points to the combined ratio. <\/p>\n

Retail Property & Casualty Operating Profit: Grew 14% year on year. <\/p>\n

Retail Property & Casualty Underlying Combined Ratio: Improved by 60 basis points to 94.6%. <\/p>\n

EMEA Motor Combined Ratio: Improved by more than 5 points over the last two years to 96.2%. <\/p>\n

Life Operating Profit: Record $1.3 billion, up 16% on a like-for-like basis. <\/p>\n

Life Protection Premiums: Grew 10%. <\/p>\n

Farmers Operating Profit: Strongest half year ever at $1.2 billion. <\/p>\n

Farmers Exchanges Premiums: Grew 4%. <\/p>\n

Farmers Exchanges Combined Ratio: Industry-leading at 82.4%. <\/p>\n

Farmers Exchanges Surplus Ratio: 58.7%. <\/p>\n

Release Date: August 06, 2026 <\/p>\n

For the complete transcript of the earnings call, please refer to the full earnings call transcript<\/a>. <\/p>\n

Positive Points <\/p>\n

Record business operating profit of $4.8 billion, up 13%, with core EPS growth of 11.5%. <\/p>\n

Strong growth in strategic areas: P&C premiums up 7%, life protection premiums up 10%, and Farmers exchanges gaining market share for the first time in a decade. <\/p>\n

Excellent combined ratio of 92.7% in P&C, with low nat cat losses at 1.9%. <\/p>\n

Life insurance delivered a record operating profit of $1.3 billion, up 16% like-for-like, leading to raised full-year guidance. <\/p>\n

Farmers achieved its strongest half-year ever with operating profit of $1.2 billion and an industry-leading combined ratio of 82.4%. <\/p>\n

Specialty and middle market growth, particularly in construction and infrastructure, with premiums up 18% in construction, driven by AI-related infrastructure demand. <\/p>\n

Confidence in meeting or exceeding 2027 financial targets, supported by strong momentum and structural growth trends. <\/p>\n

Negative Points <\/p>\n

North American property rates remain negative, around -10%, with a slight worsening in Q2. <\/p>\n

Expense ratio increased year-on-year due to business mix and commission impacts, though management expects pure expenses to decline by year-end. <\/p>\n

Accident-year combined ratio in commercial lines worsened by 120 basis points year-on-year, partly due to specific losses in surety and property. <\/p>\n

Prior-year development (PYD) is expected to remain modestly elevated in the near term, which may be seen as a drag on future results. <\/p>\n

Farmers’ gross written premium growth of 4% in H1 is below the full-year outlook, with a tail of cancellations from past portfolio cleaning actions. <\/p>\n

The proposed acquisition of Beazley is still pending regulatory approvals, with completion expected in Q4, creating uncertainty. <\/p>\n

Rates in the U.S. are moderating, with property rates negative and workers’ comp flat, indicating a competitive market. <\/p>\n

Q & A Highlights <\/p>\n

Q: Could you provide an update on the timing for the completion of the Baloise deal and whether the recent results have changed your thoughts on the ROI enhancement?A: Mario Greco (Group CEO) stated that the deal is a Q4 event, with no issues or delays, but it simply takes time to receive approvals from all jurisdictions. He declined to comment on Baloise’s results, noting that Zurich has no information about the company while they remain separate entities. <\/p>\n

Q: Can you elaborate on the North American rate environment, the outlook change from stabilizing to moderating, and the performance of the specialty business across different segments?A: Mario Greco (Group CEO) detailed that Q2 rates were double-digit positive in specialty, high single-digit positive in liability and motor, flat in workers’ comp, and negative around 10% in property. Specialty growth is predominantly driven by the construction and infrastructure vertical, which offers the best margins. E&S remains an area of careful underwriting, while financial lines are showing improvement. Claudia Cordioli (Group CFO) added that growth is broad-based geographically, with continental Europe becoming more prominent in infrastructure and energy projects. <\/p>\n

Q: Could you discuss the commercial accident year combined ratio ex-cat trend, which was 120 basis points higher year on year, and the expense ratio increase?A: Mario Greco (Group CEO) explained that pure expenses are expected to come down by year-end, while the commission ratio reflects a more stable and profitable business mix, including products like Travel and FNI. Claudia Cordioli (Group CFO) noted that two-thirds of the combined ratio movement is from the loss ratio and one-third from commissions. The loss ratio impact is driven by portfolio management, reduced property growth, and some specific losses in surety. She emphasized that the company is not compromising underwriting discipline and is growing mostly in profitable short-tailed lines. <\/p>\n

Q: What are the major seasonality or sequential changes to be aware of in 2H versus 1H, particularly regarding the life result and the SST walk’s small change in target capital?A: Mario Greco (Group CEO) highlighted that 2H seasonality is dominated by nat cat exposure, though Zurich has consistently outperformed the market in managing cat exposure. Costs are typically lighter in 2H, and life sales should strengthen as distribution channels meet budgets. Claudia Cordioli (Group CFO) explained that the tiny incremental capital increase is diversified away due to broad-based growth across life, non-life, and geographies, with any potential 2H impact remaining in the low single-digit areas. <\/p>\n

Q: Given the strong life performance, what could drive further growth next year, and are you seeing any risks to the data center business from local opposition?A: Mario Greco (Group CEO) stated that life growth will continue through expansion in Asia, particularly Hong Kong and Japan, and Latin America with Santander. He expects life results to exceed $2.5 billion. On data centers, he clarified that Zurich only insures authorized projects, so local opposition is not a risk. The company’s competitive advantage lies in its integrated vertical offering, including construction risk, builder’s risk, and surety, which few competitors can match. <\/p>\n

Q: What is your competitive edge in data center growth, and are consortiums scaling up to offer higher limits a threat to pricing?A: Mario Greco (Group CEO) emphasized Zurich’s decades-long expertise in construction and infrastructure, with hundreds of specialized underwriters and a fully integrated vertical offering. The market is in excess demand, not excess supply, so additional capacity is welcome. Claudia Cordioli (Group CFO) added that Zurich placed a variable quota share on July 1, providing $1 billion of additional capacity, and innovative consortium solutions are a necessity to support projects of this scale. <\/p>\n

Q: Can you provide the combined ratios for the U.S. Commercial and international segments, and are you also insuring data centers once they are operational?A: Mario Greco (Group CEO) clarified that Zurich does not insure operational data centers, as that is casualty business and not a target risk. Claudia Cordioli (Group CFO) noted that both the U.S. Specialty underlying combined ratio and international ones are improving year on year, with international improving almost a point, and offered to provide exact numbers offline. <\/p>\n

Q: Should the expectation of modestly elevated PYD be interpreted as cycle management to offset deteriorating attritional claims ratios?A: Mario Greco (Group CEO) rejected the notion of cycle management, explaining that the elevated PYD results from releasing excess reserves built in short-tailed lines over the past years, particularly from conservative reserving following the 2022 inflation spike. Claudia Cordioli (Group CFO) added that the company has been extra cautious in reserving for property lines and travel, and this prudence is now coming through in PYD. <\/p>\n

Q: Farmers’ gross return premium growth of 4% is below the full-year outlook. How will you achieve the target, and what is the competitive environment?A: Mario Greco (Group CEO) explained that the 4% growth reflects a soft U.S. market for auto and homeowners, but Farmers is gaining market share for the first time in a decade, with policy count growth of 215,000 in H1. The portfolio is still absorbing a tail of cancellations from past cleaning actions, which are now over. He noted that Farmers’ results stand out compared to competitors, and growth will accelerate as rates become more conducive. <\/p>\n

Q: Can you explain the logic of growing non-life at around 30% after-tax ROE, and what happened with the Swiss pension fund pricing issue?A: Mario Greco (Group CEO) explained that the company targets BOP and EPS growth, not combined ratio alone. He noted that while the combined ratio improved by only 20 basis points over two years, BOP improved by almost $1 billion, which is a good trade. On the Swiss issue, he stated that colleagues underpriced customers against the company, which was not compliant with rules, and the regulator intervened to protect solvency. He expressed surprise at the behavior, as it was not incentivized. <\/p>\n

For the complete transcript of the earnings call, please refer to the full earnings call transcript<\/a>. <\/p>\n","protected":false},"excerpt":{"rendered":"This article first appeared on GuruFocus. Business Operating Profit: Increased 13% to $4.8 billion. Core EPS: Grew 11.5%.…\n","protected":false},"author":2,"featured_media":112552,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[128],"tags":[7102,3586,1304,5485,3741,7136,51,219],"class_list":["post-112551","post","type-post","status-publish","format-standard","has-post-thumbnail","category-zurich-insurance","tag-basis-points","tag-claudia-cordioli","tag-combined-ratio","tag-farmers","tag-mario-greco","tag-operating-profit","tag-zurich","tag-zurich-insurance"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ch\/117051422591316664","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/112551","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/comments?post=112551"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/112551\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media\/112552"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media?parent=112551"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/categories?post=112551"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/tags?post=112551"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}