Zurich Insurance targets higher return on equity, setting out 3-year goals

Zurich Insurance ZURN unveiled on Thursday three-year targets a year early, setting goals for a core return on equity of more than 23% between 2025 and 2027, as well as average annual growth of more than 9% in core earnings per share.

Ahead of an investor day, Europe's fifth-largest insurer announced a target of cumulative cash remittances above $19 billion between 2025 and 2027.

Zurich had previously aimed to raise its business operating profit after tax return on equity (BOPAT ROE) to above 20% by 2025, and to generate compound organic growth in earnings per share of 8% per year in its 2023-2025 targets.

CEO Mario Greco said Zurich was performing exceptionally well but saw new opportunities to boost growth.

"To reflect our growing confidence, we are launching a new three-year plan with the most ambitious targets in Zurich's history," he said in a statement.

Insurers have enjoyed strong profits in recent years as they pushed up premiums in response to inflation and to losses from the COVID-19 pandemic, wars and natural disasters.

On commercial insurance, Zurich aimed for business operating profit to exceed $4.2 billion and middle market gross written premiums to surpass $10 billion by the end of 2027.

On life insurance, protection gross written premiums should increase to a compound annual growth rate of 8%, Zurich said, aiming for further growth in capital-light unit-linked business.

Zurich's protection business, which represents almost 60% of its life business operating profit, will be consolidated under a single global unit, the company added.

On retail and SME business, the firm said it planned to improve long-term profitability through a combination of strengthened underwriting, improvements in the portfolio mix and by leveraging scale and technology assets.

Zurich had previously targeted cumulative cash remittances above $13.5 billion. Its dividend policy targeted a pay-out ratio of around 75% of net income attributable to shareholders.