Zurich UK profit up 9% in H1 despite weather and reserve strengthening

Zurich’s UK general insurance business made an operating profit of £88m in the first half of 2014, up 8.6% on the £81m it made in last year’s first half.

The improvement came despite the weather claims that hit the industry in the first quarter of the year.

The combined operating ratio (COR) improved by three percentage points to 95% (H1 2013: 98%) despite the weather claims and reserve strengthening for historical long-tail liabilities.

Within this, the expense ratio improved by 0.3 points to 31.3%, which Zurich said was a result of its continued focus on expense management across the business.

Zurich’s gross written premium increased by 2% to £841m (H1 2013: £826m) despite the competitive environment and Zurich’s decision to pull its own-branded products from price comparison sites.

Zurich UK general insurance chief executive Dave Smith said: “All of our key measures have improved compared to the same position in 2013.

“This has been achieved by an excellent underlying performance offsetting things like the weather losses in the first quarter, a degree of reserve strengthening in historical long-tail liabilities and unrelenting competition.”

He added: “We have seen strong growth in our commercial lines business, with growth in personal lines broker business offsetting expected reductions as a result of us withdrawing Zurich-branded products from aggregator sites.

“I expect these trends to continue in the second half of the year.”