Zurich on track to meet 2019 targets as pricing positive

(Reuters) — Zurich Insurance Group Ltd. is on track to meet or beat its financial targets to 2019 and is seeing positive trends in property/casualty insurance pricing.

Europe’s fifth-biggest insurer made the forecast on Thursday despite a 2% fall in property/casualty gross written premiums in dollar terms to $9.18 billion in the first quarter as a result of currency movements and the disposal of its ADAC business.

Prices increased around 2%, Zurich said, adding that it had been a “relatively benign” quarter for natural catastrophes although it gave no profit figures.

Its shares fell 0.9% in early trading while the European insurance sector index dropped 1.2%.

Life annual premium equivalent fell a reported 6% to $1.18 billion, also hit by the dollar’s strength.

Zurich Chief Financial Officer George Quinn had said in February he expected the group’s top line to be flat this year, with a last tranche of about $400 million in savings the main earnings driver.

Mr. Quinn said on Thursday P&C pricing had started to slow late last year after peaking at around 3% in the second quarter of 2018. It was back to the mid-to-lower 2% range in the first quarter, helped especially by business in North America, where pricing was up more than 4%.

“If this trend continues it does offer the potential to see some meaningful improvement in profitability,” Mr. Quinn said on a media conference call following the results.

He declined to comment on the impact of natural catastrophes on quarterly profit, but said: “If you look across the industry in general the quarter has been relatively benign. You haven’t seen the scale of events that say we saw for example in Q3 last year.”