Investor Day 2021 November 18, 2021 - Zurich Insurance
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Investor Day 2021 November 18, 2021
Agenda
TIME TOPIC SPEAKER
14:00 - 14:35 Strategic update Mario Greco
14:35 - 14:50 Digitalization, data intelligence & platforms Ericson Chan
14:50 - 15:00 Break
15:00 - 15:30 Commercial insurance Sierra Signorelli
15:30 - 16:00 Financial update George Quinn
16:00 – 16:30 Break
16:30 – 17:15 Q&A
17:15 – 17:20 Wrap-up Mario Greco
© Zurich
November 18, 2021 Investor Day 2
Delivering on targets November 18, 2021 Mario Greco Group CEO
STRATEGY UPDATE
Key messages
We are well on track to deliver on our 2020-2022 targets; all our businesses are growing
Execution
with improved underlying performance and continued focus on efficiency
We are creating value through increased customer satisfaction while simplifying product
Customer focus
propositions and enhancing our distribution
We are continuously investing in our capabilities to create value to our customers and
Innovation
support growth
Our strategy and business mix allow us to deliver superior shareholder returns supporting
Rewarding shareholders
our attractive dividend policy
We place sustainability at the core of the organization and are supporting our customers
ESG integration
in their transition to a net-zero emissions future
© Zurich
November 18, 2021 Investor Day 4
STRATEGY UPDATE
We are well on track to deliver on our 2022 targets
2020 - 2022 TARGETS WE HAVE ADAPTED TO THE CHANGED ENVIRONMENT TO
DELIVER 2020 – 2022 TARGETS
Target HY-21
Commercial
Taken advantage of
BOPAT ROE >14% 13.0% favorable market
conditions to
improve profitability
EPS ≥5% n.m. and quality of the
commercial book
Retail
SST ≥160% 206% Continued to build
capabilities through Efficiency
the pandemic in Additional focus on
Cash Remittances >11.5bn >7.4bn1 order to position expenses to deliver
Zurich as the efficiency gains
consumers’ insurer
of choice
© Zurich
1 Includes cash remittances for FY-20 and FY-21e.
November 18, 2021 Investor Day 5
STRATEGY UPDATE
P&C business has returned to growth, driven by both Retail
and Commercial insurance
P&C GWP GROWTH (%)1 HY-21 P&C GWP GROWTH BY DRIVER (USDbn)2
COMMERCIAL
12% 9.3
0.5
0.2
+13% 8.2
0.7
Like-for-like1
6%
4%
1%
0% RETAIL AND SME 6.8
FY-17 FY-18 FY-19 FY-20 HY-21
0.4
+8% 6.3 0.0
Like-for-like1 0.1
HY-20 Rate change Change in Net new HY-21
exposure business3
1 In constant FX and after adjusting for closed acquisitions and disposals.
© Zurich
2 In constant FX, net of premiums for ceded facultative reinsurance, captives and pools/co-reinsurance agreements. Commercial excludes crop (USD 0.5bn growth year-on-year at HY-21).
3 Includes also the impact of non-renewable business, changes in scope and other adjustments.
November 18, 2021 Investor Day 6
STRATEGY UPDATE
Our Retail P&C business delivers a healthy performance and
is growing despite challenging market conditions
PORTFOLIO HEALTHY AND STABLE GROWING PORTFOLIO DESPITE
PROFITABILITY OVER TIME CHALLENGING MARKET CONDITIONS
FY-20 GWP (USDbn) Zurich Retail and SME combined ratio (%)1 GWP growth like-for-like (%)1,2
8%
20.1 94% 94% 92% 94% 94% 7%
4% 4%
12.5
2% 2%
1% 1%
-2%
-3%
Zurich Retail & SME Farmers Exchanges3 FY-17 FY-18 FY-19 FY-20 HY-21 FY-17 FY-18 FY-19 FY-20 9M-21
Zurich Retail & SME Farmers Exchanges3
1 Alternative Markets is reported under Zurich Retail & SME for the time period FY-17 to FY-19.
© Zurich
2 In constant FX and after adjusting for closed acquisition and disposals.
3 For all references to Farmers Exchanges see the disclaimer and cautionary statement.
November 18, 2021 Investor Day 7
STRATEGY UPDATE
We continue to grow in the COVID-19 challenged SME sector
through prioritizing investments in our key markets
UNITED KINGDOM SWITZERLAND GERMANY
GWP GWP GWP
+3% p.a. +5% p.a. +3% p.a.
Like-for-like1 Like-for-like1 Like-for-like1
• New digital platform for our customers and • Integration of SME services into digital • Reduced quote & apply systems from 10 to 1
brokers, with self-serve quote, buy and renew advisory solutions for agents • Started simplifying SME products from 50 to
capabilities, and digital documentation and • Improved broker preference from #5 to #22 24
communications • Improved TNPS score +103 • Improved time-to-market of underwriting
• Simplified SME products from 108 to 10 • Enhanced product proposition with new All offers: >70% offers within 24h
• Improved broker preference from #7 to #32 Risk Property product and leading cyber • Improved TNPS score +163
• Improved TNPS score +193 proposition • New partnerships with digital SME platform for
• New partnership with UBS for SME products broker business Thinksurance and Metro for
SME customers
1 In constant FX and after adjusting for closed acquisition and disposals for the time period FY-19 to FY-21e.
© Zurich
2 Broker survey results as of HY-21. UK broker ranking based on Marsh commercial broker services. CH broker ranking based on Swiss broker panel survey.
3 TNPS impact for the time period FY-19 to 9M-21.
November 18, 2021 Investor Day 8
STRATEGY UPDATE
Renewed and new distribution agreements are expanding the
pool of addressable customers
WE HAVE A PROVEN TRACK RECORD IN SUCCESSFULLY WE ARE CONTINUOUSLY EXPANDING OUR FOOTPRINT
COLLABORATING WITH 3RD PARTY DISTRIBUTORS THROUGH NEW PARTNERSHIPS
Renewed and new bank partnerships
P&C distribution mix (%) 1 Life distribution mix (%)2
Renewed partnerships New distribution partners
7% 2%
8%
26% 33%
14% Access to ~25m
customers
71%
Renewed and new affinity partnerships
39%
Various
automotive OEMs
Brokers IFA brokers / agents
Agents Banks
Banks and affinities CLP3
Access to >40m
Direct Other customers
1 Based on FY-20 GWP .
2 Based on 9M-21 APE and includes Farmers Life and Zurich Global Employee Benefit Solutions which has been reclassified from Life to Zurich Global Ventures (formerly known as Global Business Platforms)
© Zurich
in Group Functions and Operations in Q1-21.
3 Corporate Life & Pensions (CLP).
November 18, 2021 Investor Day 9
STRATEGY UPDATE
Increased customer satisfaction drives net customer growth
together with new acquisitions
HIGHER CUSTOMER SATISFACTION IMPROVED RETENTION NET CUSTOMER GROWTH
ACROSS THE GROUP1
+2.5 million
EMEA net new customers4
Farmers
+10 +16
+6 +7 +19 +3ppts
EMEA2
Asia Pacific1
Latin America
+3 +2ppts Flat
+12 APAC2 Farmers3
+16
+12
FY-19 9M-21
1 Change in TNPS for the time period FY-19 to 9M-21. Asia Pacific: Australia Life and Japan P&C.
2 Change in customer retention of EMEA includes Switzerland, Germany, UK and Italy and APAC includes Japan P&C and Australia for the time period FY-19 to 9M-21.
© Zurich
3 Change in premium retention for the time period FY-19 to 9M-21.
4 Includes net new customers of Zurich only without Farmers Exchanges. For all references to Farmers Exchanges see the disclaimer and cautionary statement.
November 18, 2021 Investor Day 10STRATEGY UPDATE
We continue to address customer pain points in order to
improve customer satisfaction
ACTIONS ON NPS THAT SHOW WE ARE ON THE RIGHT PATH
TNPS
Pain point Action
impact
Long claims processing Rolled-out fully automated and
+5pts
time digitalized fast track claims processing
Long purchasing journey
Streamlined routing of broker-originated
lead times and non-
queries and enhanced data capabilities +12pts
competitive pricing in
to improve response times and pricing
broker channel
Inconsistent service Rolled-out training to drive consistent
levels in customer customer service culture in front- and +8pts
service back-offices
© Zurich
November 18, 2021 Investor Day 11STRATEGY UPDATE
Satisfied customers buy more from us and stay longer
SATISFIED CUSTOMERS ARE MORE …BUY MORE… …AND STAY LONGER
LOYAL…
Time on book by customer satisfaction1 Average # of policies per customer1 Time on book by policyholder density (# of years)1
1.3x 1.2x ~3x
Detractors Promotors Detractors Promotors Single policyholder Multi policyholder
© Zurich
1 Based on Zurich Switzerland data.
November 18, 2021 Investor Day 12STRATEGY UPDATE
Farmers Exchanges1 is focused on growing customer reach
by expanding and diversifying distribution
TARGETED INITIATIVES HAVE RESULTED IN IMPROVED INCREASED NEW BUSINESS PRODUCTIVITY ACROSS ALL
NEW BUSINESS PRODUCTIVITY DISTRIBUTION CHANNELS
New business policy count (000s) • More licensed and appointed staff within agencies
EXCLUSIVE
AGENT (EA) • Strengthened support system through
improvements to technology and lead generation
+25% 17% growth YoY
+15% 61% NB Mix • Expanded auto and home product offering
1,614 Like-for-like2
1,402 INDEPENDENT • Introduced standard auto and home offerings
1,292
AGENT (IA) • Increased number of IA relationships by ~2,000,
bringing total to ~35,000
31% growth YoY
32% NB Mix • Rollout of Farmers non-standard products into
incremental Metlife IA relationships
DIRECT • Added Worksite Marketing benefits from 4x higher
brand awareness of Farmers’ brand
HY-19 HY-20 HY-21 93% growth YoY
• Broadened reach to 3,800 employers with ~37m
7% NB Mix
eligible employees
MetLife P&C acquisition3
• Enhanced direct-to-consumer offering and call
center experiences
1 For all references to Farmers Exchanges see the disclaimer and cautionary statement.
© Zurich
2 In constant FX and after adjusting for closed acquisitions and disposals.
3 HY-21 reflects partial year for additional new business given the time of the close of the acquisition.
November 18, 2021 Investor Day 13STRATEGY UPDATE
Improved portfolio quality in Commercial insurance positions
us well for success through the cycle
REBALANCED PORTFOLIO IMPROVED PROFITABILITY AND REDUCED VOLATILITY
-14ppts
27% 34% 107% 100% 100%
97% 92%
NEP by line of 2%
business (%) 42% 32% Combined
22% 25% ratio (%)
9% 9%
FY-17 FY-20 FY-17 FY-18 FY-19 FY-20 HY-21
Property Casualty Specialties Other1 COVID-19 impacts2 Combined ratio
IMPROVED QUALITY
24% 31%
Share of premium Large loss
per deductible 51% 47% volatility (ppts)4
13ppts 4ppts
band (%)3
24% 23%
2020 2021 Q1-14 Q1-17 Q2-21
>USD 100k USD 10k-100kSTRATEGY UPDATE
Our Life business is a key contributor to our earnings,
supported by a unique and resilient distribution footprint
OUR LIFE BUSINESS IS A KEY CONTRIBUTOR TO BOP BALANCED DISTRIBUTION MIX
BOP by business (USDbn) 9M-21 Annual premium equivalent by pillar (%)1
2%
2.9 26%
33%
2.1
2.1
1.6
1.4 1.5
1.4 1.4
1.7 1.7
~30%
1.5 1.5 Life contribution
to BOP 39%
FY-17 FY-18 FY-19 FY-20
Life (incl. Farmers Life) P&C (incl. Farmers Re)
IFA brokers / agents Banks CLP2 Other
Farmers Management Services
1 Includes Farmers Life and Zurich Global Employee Benefit Solutions which has been reclassified from Life to Zurich Global Ventures (formerly known as Global Business Platforms) in Group Functions and Operations
© Zurich
in Q1-21.
2 Corporate Life & Pensions (CLP).
November 18, 2021 Investor Day 15STRATEGY UPDATE
We have a strong focus on capital light products with a
leading market position in protection
BUSINESS MIX WITH FOCUS ON A LEADING PLAYER IN THE LIFE STRONG PROTECTION FRANCHISE
CAPITAL LIGHT PRODUCTS1 PROTECTION MARKET 1,2 AND FINANCIALS
9M-21 New business mix FY-20 APE protection (%)
8% 3.9
15% ~70 # bancassurance partners
41%
APE (%)
2.0
1.7 ~400 # underwriters
35% 1.5
4% 1.3
1.0
22% -3%
0.6
New business value (%) 350k # claims handled3
77% Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6
Share of protection business by peer:
>20% Internal rate of return (HY-21)
Protection Corporate savings
64% 38% 17% 40% 24% 27% 9%
Unit-linked Savings & annuity
1 Includes Farmers Life and Zurich Global Employee Benefit Solutions which has been reclassified from Life to Zurich Global Ventures (formerly known as Global Business Platforms) in Group Functions and Operations
in Q1-21.
© Zurich
2 Based on earnings disclosures. Peers: AIA, Allianz, AXA, AVIVA, Generali, Prudential.
3 Scope of claims excludes Health & Medical claims.
November 18, 2021 Investor Day 16STRATEGY UPDATE
We are taking decisive steps in our sustainability strategy
OUR 1.5˚C FUTURE CONFIDENCE IN A WORK
DIGITAL SOCIETY SUSTAINABILITY
• Committed to no longer underwrite • Global implementation of Data • Increased gender diversity
new greenfield oil exploration commitment almost completed at Executive Committee and
projects1; full phase out of thermal • Rolling out AI Assurance leadership level
coal from underwriting portfolio2; not Framework based on key ethical • Doubled number of learning hours
underwrite oil & gas drilling and principles fairness, transparency as part of our effort to strengthening
production in the Arctic3 and accountability the learning culture
• Targeted interim CO2 reduction in • Used the hybrid working model as
investments and operations an opportunity to create a healthier
• Founding member of Net Zero and more resilient organization
Insurance Alliance • Further improved
• Launch of Carbon-Neutral Fund employee satisfaction
and other ESG funds for life
customers
1 Unless meaningful transition plans are considered to be in place.
© Zurich
2 By 2030 for OECD and EU27 and 2040 for the rest of the world, unless company has formally approved science-based targets in place, approved by either SBTi or similar scientifically accredited body.
3 Considered as anything north of 66 degrees latitude with the exception of the Norwegian Continental Shelf (NCS).
November 18, 2021 Investor Day 17STRATEGY UPDATE
We expand our offering of products and services to help
customers transition to a net-zero emissions future
PROPERTY & CASUALTY LIFE UNIT-LINKED
Launch of the first Insurance-Carbon Neutral World
< Offering of business resilience services such as Climate < Equity Fund, combining a low-carbon investment
Resilience Services; our experts help customers identify Icon
strategy with carbon offsetting to boost investment
and mitigate current and future natural hazards risks
options for climate-conscious life insurance customers
< Increase in resources allocated to large and complex < Development of new, innovative ESG Funds
renewable energy solutions to become the partner of propositions in major markets to be offered as default
choice in the Net Zero transition to our customers to distribution partners and customers
Leveraging local opportunities such as hydrogen truck
< < Leveraging Responsible Investments infrastructure
insurance on a pay-per-use model or insurance
and expertise to support developing solutions most
protection related to production projects of green
adequate to the market and the needs of customers locally
hydrogen providers
© Zurich
November 18, 2021 Investor Day 18STRATEGY UPDATE
Key messages
We are well on track to deliver on our 2020-2022 targets; all our businesses are growing
Execution
with improved underlying performance and continued focus on efficiency
We are creating value through increased customer satisfaction while simplifying product
Customer focus
propositions and enhancing our distribution
We are continuously investing in our capabilities to create value to our customers and
Innovation
support growth
Our strategy and business mix allow us to deliver superior shareholder returns supporting
Rewarding shareholders
our attractive dividend policy
We place sustainability at the core of the organization and are supporting our customers
ESG integration
in their transition to a net-zero emissions future
© Zurich
November 18, 2021 Investor Day 19Technology enabling growth November 18, 2021 Ericson Chan Group Chief Innovation & Digital Officer
DIGITALIZATION, DATA INTELLIGENCE & PLATFORMS
Drive business growth, improve customer experience and
enable a new engagement model
DIGITALIZATION DATA PLATFORMS
PLATFORM PLATFORM PLATFORM PLATFORM PLATFORM
5 Empower
S
Accelerate
S
Simplify and
S all
Data drives
S
Enable
S
Key focus Commercial Retail automate everything ecosystems
areas we do
3 PLATFORMS PLATFORMS PLATFORMS
Structural Governance Capability building Investment shape
changes
1 PLATFORMS
Security, stability and scalability
Foundation
© Zurich
November 18, 2021 Investor Day 21High quality portfolio delivering results November 18, 2021 Sierra Signorelli CEO Commercial Insurance
COMMERCIAL INSURANCE
Key messages
We have a leading global commercial insurance franchise, with a well-balanced portfolio
Global leader
and distinctive capabilities
Underwriting actions and higher rates over the past years resulted in 14ppts of
Outstanding results
improvement in the combined ratio since 2017 to 92%, with reduced volatility
We will continue to improve the quality of our portfolio and build a stronger middle market
Portfolio quality
presence to deliver strong risk adjusted results across the cycle
The current market conditions will enable us to further improve our competitive position
Well positioned
and profitability
We have meaningful opportunities to continue growing profitably and to deepen
Profitable growth
customer engagement while improving risk quality through resilience services
© Zurich
November 18, 2021 Investor Day 23COMMERCIAL INSURANCE
A leading franchise, with distinctive capabilities and
a well-balanced portfolio
3RD LARGEST COMMERCIAL INSURER DISTINCTIVE CAPABILITIES WELL DIVERSIFIED PORTFOLIO
FY-20 NET EARNED PREMIUMS (USDbn)1 FY-20 NET EARNED PREMIUMS (USDbn)
International programs insurer
#1 to multinational corporations 9%
Top 3 Provider of captive insurance 34%
solutions 25%
USD 14.7bn
Global risk engineering
#1 franchise2
Customers served with leading
750 relationship model 32%
Insurer by share of wallet with
Top 3 global brokers Property Casualty Specialties Other3
1 Source: Company reports. Data includes only primary insurance on a more comparable basis. Zurich view includes alternative markets in North America and municipal business in the UK and excludes SME.
© Zurich
2 With regards to multi-line insurers.
3 Mainly includes U.S. direct markets (i.e., P&C products for vehicle dealerships and Finance and Insurance products).
November 18, 2021 Investor Day 24COMMERCIAL INSURANCE
Our strategy positions us well for success through the cycle
UNCHANGED STRATEGIC PRIORITIES INDUSTRY ENVIRONMENT
Customer focus
Maintain a Leverage Hard pricing cycle
on risk mitigation
balanced actionable
portfolio insights
Increasing
Evolving distribution
digitalization and
landscape
use of data
Enhance
Focus on
people driven Evolving natural Macroeconomic
the customer
capabilities catastrophe and regulatory
environment environment
© Zurich
November 18, 2021 Investor Day 25COMMERCIAL INSURANCE
Disciplined execution drives outstanding financial results
NEP GROWTH (%)1 COMBINED RATIO (%) LARGE LOSS VOLATILITY BOP (USDbn)
(ppts)4
1.5
10% -14ppts2 2.0
107% 0.4 1.1
100% 100% 1.2
97%
2% 92%
4% 2.8
2.5
1.9 1.9 1.8
1% 78% 72% 69% 69% 63%
-0.5 -0.6
-1% -0.8
13ppts 4ppts -1.1
-1.5
28% 28% 28% 29% 29% -0.3
-5%
FY-17 FY-18 FY-19 FY-20 HY-21 FY-17 FY-18 FY-19 FY-20 HY-21 Q1-14 Q1-17 Q2-21 FY-17 FY-18 FY-19 FY-20 HY-21
COVID-19 impacts3 BOP excl. Cats and COVID-19
Loss ratio Cat losses
Expense ratio COVID-19 impacts3
1 In constant FX.
2 Including rounding.
© Zurich
3 COVID-19 claims, frequency benefits and premium refunds.
4 Volatility is measured as difference between lowest and highest ratio for the indicated period. Numbers for the period before 2017 refer to the old Global Corporate perimeter.
November 18, 2021 Investor Day 26COMMERCIAL INSURANCE
Strong performance driven by improvement in portfolio quality
REBALANCED BUSINESS MIX LIMITING CAT EXPOSURE IMPROVED TERMS & CONDITIONS
AND DISCIPLINED RISK APPETITE
NET EARNED PREMIUMS BY LINE OF BUSINESS (%) FY-20 vs. FY-17 (%)2
+45% Tightened wordings and
increased use of Zurich
27%
34% standards
Higher customer retentions
42% 32% and greater risk sharing
+15%
22% 25%
Refinement of appetite for
9% 9% industries and coverages
FY-17 FY-20 Property NWP Cat exposure
(Net AAL)3
Strategic capacity
Property Casualty Specialties Other1 deployment
1 Mainly includes U.S. direct markets (i.e., P&C products for vehicle dealerships and Finance and Insurance products).
© Zurich
2 Catastrophe exposure Q4-20 vs. Q4-17. NWP excludes crop.
3 AAL (Average Annual Loss) after application of catastrophe specific reinsurance.
November 18, 2021 Investor Day 27COMMERCIAL INSURANCE
Current market conditions offer opportunities to further
improve profitability
RATE INCREASES REMAIN STRONG… …AND ABOVE CLAIMS TRENDS INFLATION RISK MITIGANTS
NORTH AMERICA (9M-21)
Changes in consumer price inflation do
14%
Property not feed directly into the drivers of claims
13%
trends in many lines
Liability
For first party covers, the business can be
repriced quickly
6%
Motor
3% For long tail lines, our reserving approach
is based on long-term trends which are
1%
Workers Comp well above recent inflation trends
FY-17 FY-18 FY-19 FY-20 9M-21
Rate change (%)1 Rate change (%)1 Frequency and severity (%)2
In workers comp, shifted from guaranteed
cost to high deductible policies
© Zurich
1 GWP development due to premium rate change as a percentage of the renewed portfolio against the comparable prior year period.
2 Does not include crop, finance and insurance, captives, surety, and other ‘non monitored’ businesses.
November 18, 2021 Investor Day 28COMMERCIAL INSURANCE
Portfolio optimization to support growth in target segments
PROPERTY CASUALTY SPECIALTIES
OUTLOOK OUTLOOK OUTLOOK
Combined Combined Combined
109% 89%2 105% 98%2 106% 90%2
ratio (%)1 ratio (%) ratio (%)
5.0 6.2 3.6
3.3
4.1
4.6
NEP NEP NEP
(USDbn)3 (USDbn)3 (USDbn)3
FY-17 FY-20 FY-17 FY-20 FY-17 FY-20
Focus on risk quality, risk engineering Rebalance global liability portfolio and Continue to strengthen financial lines
and managing cat exposure maintain underwriting discipline and accident & health
1 Of which catastrophe loss ratio of 28.6% in FY-17 and 19.3% in HY-21.
© Zurich
2 HY-21 combined ratio.
3 In constant FX.
November 18, 2021 Investor Day 29COMMERCIAL INSURANCE
Middle market provides an opportunity to grow and improve
diversification to better sustain profitability through the cycle
UNDER-REPRESENTED SOLID FOUNDATION MORE STABLE AND
IN MIDDLE MARKET LESS CAPITAL-INTENSIVE BUSINESS
GWP (USDbn)1 MIDDLE MARKET vs. LARGE CORPORATE3
Meaningful presence in North
~570 17
America, UK and core markets
23%
in continental Europe -10ppts
Middle market2 38% AY loss ratio
Profitable book with headroom to
grow in selected markets -19ppts
Volatility (large loss and cat loss ratio)
77%
Large corporate 62% Building on strong capabilities and -20ppts
propositions to serve the Capital intensity ratio
middle market
Less pronounced
Market Zurich
Opportunity to support regional +
brokers’ offering with risk
pricing cycles
management services
1 Market GWP refers to FY-19 (source: Axco, McKinsey, CIAB, Zurich data). Zurich GWP refers to FY-20, excludes captives, crop, direct markets, and eliminations.
© Zurich
2 Middle market definition varies by source and is adjusted locally depending on risk complexity. Typically includes companies with revenues between USD 25m and 500m.
3 Zurich figures 2017-2020 average, excluding U.S. Alternative Markets (i.e., captives, crop, direct markets and programs).
November 18, 2021 Investor Day 30COMMERCIAL INSURANCE
Middle market strategy is leading to positive early results,
more progress to come
U.S. EXAMPLE
ENHANCE UNDERWRITING CAPABILITY GROW REGIONAL PRESENCE UNDERWRITING PROFITABILITY
+42% +7
-4ppts
New business # of regional
per underwriter offices Cats (%)
(USDm)
FY-19 FY-20 2018 YE 2021 YTD
DELIVER HOLISTIC INDUSTRY SOLUTIONS DRIVE EFFICIENT OPERATIONS AY combined ratio -9ppts
excl. cats (%) excl. Cats
~1.7x +25%
New business in # of quotes/
targeted industry underwriter
verticals (USDm) (per month)
HY-19 HY-21
FY-19 FY-21e Legacy New Platform
Platform
Focusing on building scale in North America, UK and selected markets in Continental Europe
© Zurich
November 18, 2021 Investor Day 31COMMERCIAL INSURANCE
We continue to enhance our underwriting capabilities
and invest in our people
PEOPLE DRIVEN CAPABILITIES ACTIONABLE INSIGHTS
• Focus on driving underwriting culture and • Augmented underwriter experience with easy
competencies access to insight
• Developing talent in countries while supporting • Common underwriting platforms drive
specific technical risks through centers of consistent data capture for global insights
excellence
• Portfolio and transactional decisions informed
• Continued investment in technical and by granular data from underwriting, risk
leadership development engineering, claims, and a holistic view of
global trends
SIGNIFICANT IMPROVEMENT IN UNDERWRITERS’ ENPS1 BENEFITS
(2021 vs. 2018) • Enable early identification of emerging loss trends
• Optimize deployment of risk engineering teams
+39 +44
• Strengthen underwriting discipline
• Monitor effectiveness of portfolio actions
© Zurich
1 Employee net promoter score.
November 18, 2021 Investor Day 32COMMERCIAL INSURANCE
Unique capabilities and services strengthen customer
relationships
INTERNATIONAL PROGRAMS AND CAPTIVES RESILIENCE SERVICES
Leading capabilities in helping customers navigate an We are driving deeper engagement with customers to
increasingly complex global environment prevent and mitigate evolving and emerging risks
Continue digitizing risk engineering offering to support
We issue >50,000 local Zurich experts assist 240 broader customer base
policies every year through our captive owners to optimize
international program platform their risk management strategy;
Accelerate sustainability & natural hazard services to
across 6 main lines of business across P&C and Life/benefits
support evolving catastrophe and transition landscape
Support customers in building and managing resilient
Market-leading tools help Digital connection with supply chains
customers monitor and manage customer risk management
greater compliance across systems drive efficiency and
Maintain customers business continuity with improved
>210 territories accuracy in data exchange
cyber security, prevention and detection capabilities
© Zurich
November 18, 2021 Investor Day 33COMMERCIAL INSURANCE
Accelerating engagement and developing solutions to
support ambitious decarbonization strategies of customers
WE ARE SUPPORTING THE TRANSITION OF OUR CUSTOMERS
Continue to engage carbon intense customers in Climate change
Engage risk-based dialogue to understand their transition resilience services
pathways
Provide solutions and services to support New and adapted propositions
Develop
customers’ sustainability objectives to meet customer needs
Mitigate transition and physical risk within Closing the health
Balance
underwriting portfolio while leveraging opportunities insurance gap
Founding member of the Net Zero Insurance
Measure Alliance with which we will agree a common Renewable energy
methodology and independently set interim targets proposition
© Zurich
November 18, 2021 Investor Day 34COMMERCIAL INSURANCE
Deepening our commitment to the energy transition
WE CONTINUE TO REDUCE OUR TO FURTHER SUPPORT THE ENERGY …WHILE INCREASING OUR FOCUS ON
EXPOSURE TO FOSSIL FUELS TRANSITION, WE WILL… RENEWABLE ENERGIES
2021: Successful execution of our thermal
coal, oil sands and oil shale position Proactively engage oil and gas
customers in risk-based dialogue to
understand and support transition plans
39% ~2701 Not renewed/divested
41%
firms Annual monitoring
+18% p.a.
Below threshold No longer underwrite new greenfield oil
20%
exploration projects3
2022+: Focus on exploration and production2
14% Commit to a full phase out of thermal coal
96% 4% from underwriting portfolio3,4
86%
FY-22 FY-25 FY-30
Fossil fuels
Other sectors Exploration & Production Not underwrite oil and gas drilling and Renewable energies GWP projection
Fossil fuels Midstream, Downstream & Other production in the Arctic5
1 Number of companies subject to Zurich’s coal, oil sands and oil shale policy since 2017 (Data as of June 2021).
2 Fossil fuels bound premium at year end 2020 relative to total bound premium.
3 Unless meaningful transition plans are considered to be in place.
© Zurich
4 By 2030 for OECD and EU 27 and 2040 for rest of world, unless company has formally approved science-based targets in place, approved by either SBTi or similar scientifically accredited body.
5 Considered as anything north of 66 degrees latitude with the exception of the Norwegian Continental Shelf (NCS).
November 18, 2021 Investor Day 35COMMERCIAL INSURANCE
Key messages
We have a leading global commercial insurance franchise, with a well-balanced portfolio
Global leader
and distinctive capabilities
Underwriting actions and higher rates over the past years resulted in 14ppts of
Outstanding results
improvement in the combined ratio since 2017 to 92%, with reduced volatility
We will continue to improve the quality of our portfolio and build a stronger middle market
Portfolio quality
presence to deliver strong risk adjusted results across the cycle
The current market conditions will enable us to further improve our competitive position
Well positioned
and profitability
We have meaningful opportunities to continue growing profitably and to deepen
Profitable growth
customer engagement while improving risk quality through resilience services
© Zurich
November 18, 2021 Investor Day 36Delivering results November 18, 2021 George Quinn Group CFO
FINANCE UPDATE
Key messages
Targets On track to achieve all Group financial targets
Capital allocation We expect to make significant changes in our strategy driven capital allocation
Reserve strength Reserving is focused on consistency and protection from emerging risks
We manage natural catastrophe risk to avoid increasing exposure to frequency and
Natural catastrophes
severity
Growing dividends supported by growing earnings, higher cash remittances and a strong
Shareholder rewards
balance sheet
© Zurich
November 18, 2021 Investor Day 38FINANCE UPDATE
We are focused on further improving our return on capital in
P&C and Life
RETURN ON RISK BASED CAPITAL PER SEGMENT1
Decision making process:
P&C Farmers Life
• Allocation decisions based on strategic priorities
12% 12%
12%
4%
• Financial and other market trends are considered
13%
8%
over longer periods
39%2 6%2 55%2
12% 63% • Changes in allocation should be ROE accretive
76%
76%
100%
• Priorities for released capital are elimination of
earnings dilution and growth
>14% >11% >8%FINANCE UPDATE
We have identified our key areas of focus
ILLUSTRATIONS MOTIVATION TARGETED OUTCOME STATUS
Asbestos / pollution / health Eliminate long-tail exposure to asbestos and Capital release and avoidance of adverse
portfolios pollution risks reserve development
Product creates ALM mismatches and higher Lower volatility, lower target capital
Life Portfolio – 1
volatility in target capital levels requirements and capital release
Exposure to credit with higher and/or volatile
Life Portfolio – 2 Cash and capital release for re-deployment
capital requirements
Improving trends but significant investments
P&C Portfolio – 1 Cash and capital release for re-deployment
to achieve scale in lower priority market
Risk appetite limits ability to deepen market Partner with complementary risk appetite
Other Portfolio – 1
penetration could improve proposition to customers
© Zurich
November 18, 2021 Investor Day 40FINANCE UPDATE
The sale of Life Portfolio 2 would release significant capital
and reduce exposure to rates and credit
TRANSACTION BENEFITS LIFE BOP (USDm)1
~2%p.a.
-24% Potential reduction 1,613
in SST target capital:
~USD 1.2bn 1,554 1,614
~7%p.a.
Potential SST
ratio impact: ~10ppts
Potential Group -123
Group Post-transaction liquidity impact:
~USD 200m FY-18 FY-19 FY-20
HY-21 selected sovereign credit (USDbn) Life Portfolio 1+2 COVID-19 impact
Life
© Zurich
1 In constant FX and adjusted for selected life portfolios.
November 18, 2021 Investor Day 41FINANCE UPDATE
We are on track to exceed our ROE target of >14% by FY-22
ILLUSTRATIVE BOPAT ROE DEVELOPMENT (%)
~0.0-0.5% ~15%
~2.0-2.5%
13.0%
~0.5-1.0% ~0.0-0.5%
~0.5-1.0% ~0.5-1.0%
HY-21 Growth in Investment income Business growth Productivity Portfolio quality Capital FY-22
equity base allocation / other illustrative
Target achievement not dependent on capital reallocation but it offers upside in this cycle and the next
© Zurich
November 18, 2021 Investor Day 42FINANCE UPDATE
We are delivering on our efficiency promise with further
opportunities to improve
OTHER UNDERWRITING EXPENSE (OUE) RATIO (%) OTHER UNDERWRITING EXPENSE (OUE) WALK (%)
15.4%
15.4%
0.1%
14.2% 14.1%
1.2%
13.5% 14.1%
13.4%
0.9%
12.7%
0.6% 12.7%
FY-16 FY-17 FY-18 FY-19 FY-20 HY-21 FY-16 Growth Expenses FY-18 Growth Expenses HY-21
© Zurich
November 18, 2021 Investor Day 43FINANCE UPDATE
We have reduced our long-tail business line exposure…
P&C BUSINESS MIX (GWP) NORTH AMERICA WORKERS COMP COVID-19 CASE STUDY: CALIFORNIA
PRODUCT MIX (GWP)
14ppt reduction in long tail lines exposure
USD WCIRB workers comp
~11.2bn COVID-19 gross loss estimate2
15% 18%
27%
36% USD Expected gross loss based
~0.6bn on Zurich 5.1% market share
28%
21%
21% 16% USD Our modeled estimated
10% 8% ~106m gross loss
FY-15 FY-20 2010 2012 2014 2016 2018 2020
Specialties Liability USD Our actual gross loss
Property Workers comp ~18m
High deductible1 Guaranteed costs
Motor
© Zurich
1 High deductible includes loss sensitive retrospective and captive businesses.
2 Workers Compensation Insurance Rating Bureau (WCIRB) of California mid-range estimate for FY-20 as of April 8, 2020.
November 18, 2021 Investor Day 44FINANCE UPDATE
…which benefited our Group’s reserve structure
P&C RESERVE STRENGTH WORKERS COMP LOSS DEVELOPMENT FACTORS
Proxy for current reserve levels
FY-16 FY-17 FY-18 FY-19 FY-20 9M-21 2010 2012 2014 2016 2018 2020
Best estimate Reserve strength Loss development factors1 5-year average
Ogden rate impact 10-year average excluded due to COVID-19 impact
© Zurich
1 Calculated as the ratio, for a given accident year, of losses in the xth development period divided by losses in the (x-1)th development period.
November 18, 2021 Investor Day 45FINANCE UPDATE
Natural catastrophe management is essential to the Group
GLOBAL INDUSTRY INSURED LOSSES 1980 – 2020 (USD)1 U.S. LARGE COMMERCIAL UNDERWRITING ACTIONS
200
150 Windstorm / Tornado Line Setting – reduced
100 capacity in critical zones
50
0 Windstorm AAL3 Optimization – introduced
1980 1990 2000 2010 2020 proprietary KPIs
Insured weather event losses (USDbn) GDP (USDtn)
Account / Location Based Capacity Restrictions
# OF U.S. BILLION-DOLLAR DISASTER EVENTS 1980 – 20212
157
On track for a 10% reduction in U.S. AAL3
40
17 22 18 15
12 13 10 4
Drought Flooding Freeze / Windstorm Wildfire
winter storm / tornado
The improvement in pro forma loss ratio is expected to be offset by
1980 - 2000 2001 - 2021 current trend to higher cat frequency
1 Source: Swiss Re, HX Nova Portal, insured weather event losses CPI-adjusted. GDP data from www.macrotrends.net.
© Zurich
2 NOAA National Centers for Environmental Information (NCEI) U.S. Billion-Dollar Weather and Climate Disasters (2021), CPI-adjusted. Data as of September 30, 2021.
3 Average annual loss (AAL) representing average expected loss for a portfolio in one year.
November 18, 2021 Investor Day 46FINANCE UPDATE
We are embarking on an ambitious decarbonization journey
that will reshape our business
AMBITIOUS GOALS FOR DECARBONIZATION RESHAPING OUR BUSINESS – INVESTMENTS
Category Target / Ambition
Engage with top 65% emitters without own
Engage
Operations Reduce CO2 by 50% by 2025 decarbonization targets
Energy 100% renewable power by 2022
Reduce air travel-related emission as of Targeting to help avoid 5m tons of CO2 emissions
Travel
2022 by 70% vs pre-pandemic levels Finance p.a. – achieved 2.9m tons of our target and allocated
USD 8bn to finance climate solutions as of 20201
Responsible
Investments
Reduction in CO2 intensity likely to reduce
Corporate bonds Rebalance investment income; current estimate2 is
Reduce CO2 intensity by 25% by 2025
& equity
USD 60m p.a. by 2025
Real Estate Reduce CO2 intensity by 30% by 2025
Underwriting Founding member of Net Zero Insurance Thermal coal and oil sands exclusions –
Alliance committed to set decarbonization Exclude
divested USD 0.5bn as of 2020
targets – expected by 2023
© Zurich
1 Allocated USD 4.4bn to green impact investments that helped avoid 2.9m tons of CO 2 emissions annually and USD 3.6bn to green labeled buildings.
2 Actual outcome will depend on progress of portfolio companies, the emergence of carbon markets as well as technology and nature-based solutions.
November 18, 2021 Investor Day 47FINANCE UPDATE
We are committed to delivering value for our shareholders
TOTAL SHAREHOLDER RETURN (USD)1 DIVIDEND AND DILUTED EARNINGS PER SHARE2 (CHF)
(Indexed to 100% as of January 1, 2016)
DPS growth: ~4% p.a. Growth expected to align
EPS growth: ~7% p.a. over time (allowing for FX)
260%
240% 28 28
220% 24
200% 21
20 20 20
18 19
180% 17
160%
140%
120%
100%
80%
60%
Q1 16 Q1 17 Q1 18 Q1 19 Q1 20 Q1 21 FY-16 FY-17 FY-18 FY-19 FY-20
Zurich Dividend per share (DPS)
STOXX 600 Insurance Diluted earnings per share (EPS)
SMI COVID-19 impact
© Zurich
1 Source: Refinitiv Eikon as of Nov 01, 2021.
2 Dividend subject to approval by shareholders at the Annual General Meeting. FY-20 diluted EPS adjusted for COVID-19 impacts.
November 18, 2021 Investor Day 48FINANCE UPDATE
Key messages
Targets On track to achieve all Group financial targets
Capital allocation We expect to make significant changes in our strategy driven capital allocation
Reserve strength Reserving is focused on consistency and protection from emerging risks
We manage natural catastrophe risk to avoid increasing exposure to frequency and
Natural catastrophes
severity
Growing dividends supported by growing earnings, higher cash remittances and a strong
Shareholder rewards
balance sheet
© Zurich
November 18, 2021 Investor Day 49Disclaimer and cautionary statement
Certain statements in this document are forward-looking statements, including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives of Zurich
Insurance Group Ltd or the Zurich Insurance Group (the Group). Forward-looking statements include statements regarding the Group’s targeted profit, return on equity targets, expenses, pricing
conditions, dividend policy and underwriting and claims results, as well as statements regarding the Group’s understanding of general economic, financial and insurance market conditions and
expected developments. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties and can be affected by
other factors that could cause actual results and plans and objectives of Zurich Insurance Group Ltd or the Group to differ materially from those expressed or implied in the forward-looking statements
(or from past results). Factors such as (i) general economic conditions and competitive factors, particularly in key markets; (ii) the risk of a global economic downturn, in the financial services industries
in particular; (iii) performance of financial markets; (iv) levels of interest rates and currency exchange rates; (v) frequency, severity and development of insured claims events; (vi) mortality and morbidity
experience; (vii) policy renewal and lapse rates; (viii) increased litigation activity and regulatory actions; and (ix) changes in laws and regulations and in the policies of regulators may have a direct
bearing on the results of operations of Zurich Insurance Group Ltd and its Group and on whether the targets will be achieved. Specifically in relation with the COVID-19 related statements, such
statements were made on the basis of circumstances prevailing at a certain time and on the basis of specific terms and conditions (in particular applicable exclusions) of insurance policies as written
and interpreted by the Group and may be subject to regulatory, legislative, governmental and litigation-related developments affecting the extent of potential losses covered by a member of the Group
or potentially exposing the Group to additional losses if terms or conditions are retroactively amended by way of legislative or regulatory action. Zurich Insurance Group Ltd undertakes no obligation to
publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise.
All references to “Farmers Exchanges” mean Farmers Insurance Exchange, Fire Insurance Exchange, Truck Insurance Exchange and their subsidiaries and affiliates. The three Exchanges are California
domiciled inter-insurance exchanges owned by their policyholders with governance oversight by their Boards of Governors. Farmers Group, Inc. and its subsidiaries are appointed as the attorneys-in-
fact for the three Exchanges and in that capacity provide certain non-claims services and ancillary services to the Farmers Exchanges. Neither Farmers Group, Inc., nor its parent companies, Zurich
Insurance Company Ltd and Zurich Insurance Group Ltd, have any ownership interest in the Farmers Exchanges. Financial information about the Farmers Exchanges is proprietary to the Farmers
Exchanges, but is provided to support an understanding of the performance of Farmers Group, Inc. and Farmers Reinsurance Company.
It should be noted that past performance is not a guide to future performance. Please also note that interim results are not necessarily indicative of full year results.
Persons requiring advice should consult an independent adviser.
This communication does not constitute an offer or an invitation for the sale or purchase of securities in any jurisdiction.
THIS COMMUNICATION DOES NOT CONTAIN AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES; SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT
REGISTRATION OR EXEMPTION FROM REGISTRATION, AND ANY PUBLIC OFFERING OF SECURITIES TO BE MADE IN THE UNITED STATES WILL BE MADE BY MEANS OF A PROSPECTUS
THAT MAY BE OBTAINED FROM THE ISSUER AND THAT WILL CONTAIN DETAILED INFORMATION ABOUT THE COMPANY AND MANAGEMENT, AS WELL AS FINANCIAL STATEMENTS.
© Zurich
November 18, 2021 Investor Day 50Biographies
© Zurich
November 18, 2021 Investor Day 51BIOGRAPHIES
Skills and experience External appointments
Mario Greco joined Zurich in March 2016 as Mr. Greco is chairman of the Pan-European
Group Chief Executive Officer and member of the Insurance Forum and a member of the board of
Executive Committee. Mr. Greco started his directors of the Swiss-American Chamber of
professional career in management consulting, Commerce. He is also a member of the
working in McKinsey & Company’s Milan office International Advisory Council of Bocconi
from 1986 until 1994, where he became a partner University, a member of the Executive Faculty and
in 1992 and subsequently a partner leader in the a member of the EMBA X advisory board at the
insurance segment. In 1995, he joined RAS University of St.Gallen and a member of the
(Allianz Group) in Milan as head of the claims advisory board of the Department of Economics
division. He became general manager in charge of at the University of Zurich.
the insurance business the following year. In
Mario Greco 1998, he was appointed managing director and in Educational background
Group Chief Executive Officer 2000, he became the company’s CEO. At the end Mr. Greco holds a bachelor's degree in
of 2004, Mr. Greco joined Allianz AG’s executive economics from the University of Rome and a
board, with responsibility for France, Italy, Spain, master's degree in international economics and
Nationality: Italian Portugal, Greece and Turkey. In April 2005, he monetary theory from Rochester University.
joined the Sanpaolo IMI Group in Milan as CEO of
Born: 1959
EurizonVita and in October 2005, he was
appointed CEO of Eurizon Financial Group. From
2007 to 2012, he served at Zurich, first as CEO
Global Life and from 2010, as CEO General
Insurance. In 2012 he was appointed CEO of
Generali.
© Zurich
November 18, 2021 Investor Day 52BIOGRAPHIES
Skills and experience External appointments
Ericson Chan has an extensive background in Mr. Chan is a member of the Hong Kong
technology leadership prior to joining Zurich as Monetary Authority Financial Infrastructure
Group Chief Information and Digital Officer and as Advisory Committee and a member of the Board
member of the Executive Committee in October of the Centre for Finance, Technology and
2020. From 2016 to 2020 he was CEO of Ping An Entrepreneurship in London. He is the Chairman
Technology where he helped to transform Ping of the board of Jane Goodall Institute in Hong
An Group’s business model and online Kong and is an Advisory Board member at the
ecosystems through digital services including a University of Wisconsin School of Business.
range of Fintech products and online platforms.
Between 1998 and 2016, he held several Educational background
technology and operations leadership roles at
Ericson Chan Mr. Chan graduated from the University of
Standard Chartered Bank in Hong Kong,
Wisconsin-Madison with a bachelor of science
Group Chief Information and Digital Shanghai and Singapore, including Chief
degree in computer science and has an MBA
Information Officer for North Asia, Head of
Officer from Edgewood College in Madison, Wisconsin.
Corporate & Investment Banking Operations in
China and Global Head of Consumer Banking
Nationality: Chinese (Hong Kong SAR) Technology. He also has 6 years of HealthTech
experience in the U.S.
Born: 1966
© Zurich
November 18, 2021 Investor Day 53BIOGRAPHIES
Skills and experience External appointments
Sierra Signorelli was appointed CEO Commercial None.
Insurance and became a member of the
Executive Committee in March 2021. She has Educational background
extensive experience in the insurance industry,
Ms. Signorelli holds a Bachelor of Science degree
serving as Zurich’s Group Chief Underwriting
in environmental science from the University of
Officer from September 2020 and as Chief
California, Santa Barbara. She completed the
Underwriting Officer for Commercial Insurance
Stanford Executive Program at Stanford
after joining the company in 2017. Her prior
University School of Business.
experience includes 17 years with American
International Group where she held a number of
senior leadership roles in the insurer’s Global
Sierra Signorelli Specialties division, including Global Chief
CEO Commercial Insurance Underwriting Officer, Specialty Lines and
Specialty Executive in Asia/Pacific and Global
Head of Network Partner Practice.
Nationality: U.S.
Born: 1975
© Zurich
November 18, 2021 Investor Day 54BIOGRAPHIES
Skills and experience External appointments
George Quinn started his career at KPMG 1988 in Mr. Quinn is a member of the finance chapter of
London, where he held several positions working the Swiss-American Chamber of Commerce.
with the insurance and reinsurance industry. He
joined Swiss Re in 1999 as Group Chief Educational background
Accounting Officer based in Zurich and later
Mr. Quinn holds a degree in engineering from the
served as Chief Financial Officer (CFO) for Swiss
University of Strathclyde. He is also a member of
Re Group’s financial services. Mr. Quinn became
the Institute of Chartered Accountants in England
the regional CFO for Swiss Re Americas based in
and Wales.
New York in 2005. In March 2007 he became
Swiss Re Group’s CFO. Mr. Quinn joined Zurich in
May 2014 as Group CFO and is a member of the
George Quinn Executive Committee.
Group Chief Financial Officer
Nationality: British
Born: 1966
© Zurich
November 18, 2021 Investor Day 55For further information
CALL US VISIT OR FOLLOW US
INVESTOR RELATIONS AND RATING AGENCY MANAGEMENT
Jon Hocking +41 44 628 18 34
Francesco Bonsante +41 44 628 00 68
Samuel Han +41 44 625 32 57
Michèle Matlock +41 44 625 28 50
Fabian Wiederkehr +41 44 625 33 08
EVENTS
Patricia Heina +41 44 625 38 44
Investor Relations website
Financial results and reports
Follow us
© Zurich
November 18, 2021 Investor Day 56Thank you UPCOMING EVENTS • February 10, 2022 – Annual Results 2021 • April 6, 2022 – Annual General Meeting 2022 • May 12, 2022 – Update for the three months ended March 31, 2022 • August 11, 2022 – Half year results 2022 • November 10, 2022 – Update for the nine months ended September 30, 2022 © Zurich Insurance Company Ltd
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