Annual Report 2004 ¦ Zurich Financial Services Group
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Financial Highlights Financial Highlights The following table presents the summarized consolidated results of the Group for the years ended December 31, 2004 and 2003 and the financial positions as of December 31, 2004 and 2003.The 2003 amounts have been restated following the adoption of a new accounting standard in 2004. Certain prior-year balances have also been reclassified to conform to the 2004 presentation. Consolidated operating statements in USD millions, for the years ended December 31 2004 2003 Change Gross written premiums and policy fees 49,304 48,805 1% Business operating profit 3,143 2,316 36% Net income 2,587 2,009 29% Consolidated balance sheets Zurich Financial Services Group Zurich Financial Services Group in USD millions, as of December 31 Mythenquai 2 Total Group investments 191,100 175,967 9% 8002 Zurich, Switzerland Insurance reserves, gross 246,162 223,418 10% Total shareholders’ equity 22,181 18,934 17% Phone +41 (0)1 625 25 25 www.zurich.com General Insurance key performance indicators for the years ended December 31 Business operating profit (in USD millions) 1,380 2,146 (36%) Combined ratio 101.6% 97.9% (3.7 pts) Life Insurance key performance indicators . for the years ended December 31 Annual Report 2004 Business operating profit (in USD millions) 1,063 856 24% New business profit margin (as % of APE) 11.4% 9.0% 2.4 pts Embedded value operating return, after tax 10.8% 10.5% 0.3 pts Return on common stockholder equity for the years ended December 31 Return on equity 13.3% 12.1% 1.2 pts Business operating profit (after tax) return on equity 11.5% 9.8% 1.7 pts Zurich Financial Services Group Per share data 2004 for the years ended December 31 Annual Report 2004 Diluted earnings per share (in CHF) 22.18 18.86 18% Key Performance Indicators Net income 2004 Business operating profit 2004 in USD millions, for the years ended December 31 2003 in USD millions, for the years ended December 31 2003 3,000 3,400 3,143 2,600 2,587 3,000 2,600 2,009 2,200 2,316 2,146 1,779 2,200 1,800 1,427 1,800 1,400 1,148 1,400 1,380 873 1,077 1,000 1,063 970 686 1,000 856 604 600 600 96 (1,012) (510) (495) 200 200 137 (514) (958) (698) (200) (200) (600) (600) (1,000) (1,000) Total General Life Farmers Other Corporate Total General Life Farmers Other Corporate Insurance Insurance Mgmt Businesses Center Insurance Insurance Mgmt Businesses Center Services Services General Insurance combined ratio 2004 Life Insurance embedded value 2004 in %, for the years ended December 31 2003 operating return, after tax1 2003 122% in %, for the years ended December 31 25% 23.8 118% 117. 3 114% 20% 19.6 110% 106% 15% 15.0 13.7 102% 101.6 10.8 10.5 99.0 98.7 10.0 98.3 97.9 97.5 10% 98% 95.9 7. 4 94.0 93.5 93.4 94% 5.9 5% 4.7 47510-05 90% 87.8 86% 0% Total1 North North Continental UKISA Rest of Total North Continental UKISA Rest of America America Europe the World America Europe the World Corporate Consumer Consumer 1 Including Centrally Managed Businesses. 1 Before foreign currency effects. Financial Highlights Financial Highlights The following table presents the summarized consolidated results of the Group for the years ended December 31, 2004 and 2003 and the financial positions as of December 31, 2004 and 2003.The 2003 amounts have been restated following the adoption of a new accounting standard in 2004. Certain prior-year balances have also been reclassified to conform to the 2004 presentation. Consolidated operating statements in USD millions, for the years ended December 31 2004 2003 Change Gross written premiums and policy fees 49,304 48,805 1% Business operating profit 3,143 2,316 36% Net income 2,587 2,009 29% Consolidated balance sheets Zurich Financial Services Group Zurich Financial Services Group in USD millions, as of December 31 Mythenquai 2 Total Group investments 191,100 175,967 9% 8002 Zurich, Switzerland Insurance reserves, gross 246,162 223,418 10% Total shareholders’ equity 22,181 18,934 17% Phone +41 (0)1 625 25 25 www.zurich.com General Insurance key performance indicators for the years ended December 31 Business operating profit (in USD millions) 1,380 2,146 (36%) Combined ratio 101.6% 97.9% (3.7 pts) Life Insurance key performance indicators . for the years ended December 31 Annual Report 2004 Business operating profit (in USD millions) 1,063 856 24% New business profit margin (as % of APE) 11.4% 9.0% 2.4 pts Embedded value operating return, after tax 10.8% 10.5% 0.3 pts Return on common stockholder equity for the years ended December 31 Return on equity 13.3% 12.1% 1.2 pts Business operating profit (after tax) return on equity 11.5% 9.8% 1.7 pts Zurich Financial Services Group Per share data 2004 for the years ended December 31 Annual Report 2004 Diluted earnings per share (in CHF) 22.18 18.86 18% Key Performance Indicators Net income 2004 Business operating profit 2004 in USD millions, for the years ended December 31 2003 in USD millions, for the years ended December 31 2003 3,000 3,400 3,143 2,600 2,587 3,000 2,600 2,009 2,200 2,316 2,146 1,779 2,200 1,800 1,427 1,800 1,400 1,148 1,400 1,380 873 1,077 1,000 1,063 970 686 1,000 856 604 600 600 96 (1,012) (510) (495) 200 200 137 (514) (958) (698) (200) (200) (600) (600) (1,000) (1,000) Total General Life Farmers Other Corporate Total General Life Farmers Other Corporate Insurance Insurance Mgmt Businesses Center Insurance Insurance Mgmt Businesses Center Services Services General Insurance combined ratio 2004 Life Insurance embedded value 2004 in %, for the years ended December 31 2003 operating return, after tax1 2003 122% in %, for the years ended December 31 25% 23.8 118% 117. 3 114% 20% 19.6 110% 106% 15% 15.0 13.7 102% 101.6 10.8 10.5 99.0 98.7 10.0 98.3 97.9 97.5 10% 98% 95.9 7. 4 94.0 93.5 93.4 94% 5.9 5% 4.7 47510-05 90% 87.8 86% 0% Total1 North North Continental UKISA Rest of Total North Continental UKISA Rest of America America Europe the World America Europe the World Corporate Consumer Consumer 1 Including Centrally Managed Businesses. 1 Before foreign currency effects. Our Aspiration Key Market Positions We aspire to become the leading global insurance By so doing, we will create strong relationships group in our chosen general and life insurance with customers, agents and brokers and rewarding markets, consistently delivering top-tier results for opportunities for employees. our shareholders. Financial Strength Ratings A financial strength rating is a third-party assessment its ability to meet policyholder claims. As of of an insurance company’s financial security, based on December 31, 2004, Zurich had the following ratings: Rating agency Financial strength rating Rating outlook A.M. Best A (excellent) Stable Fitch Ratings A Positive Moody’s A2 Positive Standard & Poor’s A+ Stable For additional information, see our Web site at www.zurich.com under the link Investor Relations. Business Year 2004 February 19 August 13 Zurich’s key market positions For 2003, Zurich reports a net income of USD 2.1 Hurricane Charley hits Florida, heralding the start 2nd largest in general corporate business worldwide1 1 based on gross written premiums 2003 billion (since restated to USD 2.0 billion) after a loss of six weeks of battering by Hurricanes Frances, Ivan Source: Zurich’s internal research and analysis 2 of USD 3.4 billion (including special provisions of and Jeanne in the US and the Caribbean. 4th largest general insurer in the US 2 including Farmers Exchanges*, based on net written premiums 2003 Source: A.M. Best 3 USD 3.5 billion after tax) in 2002. 4th largest general insurer in Europe 3 August 19 based on gross written premiums 2003 Source: Peer company data March 11 At half year 2004, Zurich reports a near doubling of Zurich appoints four banks to lead a USD 3 billion net income to USD1,448 million. North America – market positions revolving credit facility. Market interest is strong and September 3 2nd largest writer of property and casualty commercial 1 including Farmers Exchanges*, based on direct written premiums 2003 the facility is over-subscribed. Zurich announces its intention to raise fixed rate multi-peril insurance1 Source: A.M. Best 2 including Farmers Exchanges*, based on net written premiums 2003 April 2 senior debt in the Euro market for refinancing 2nd largest product liability insurer 2 Source: A.M. Best Zurich reinforces its strategic direction designed and general corporate purposes. The transaction 3rd largest personal lines insurer1 to generate sustained and profitable growth. raises EUR 1 billion and is more than three *“Farmers Exchanges” refers to three reciprocal insurers, their With primary focus on General Insurance and Life times over-subscribed. subsidiaries and affiliates operating mainly under the Farmers brand, to which we provide management services but do not own. Insurance, Zurich has a diversified portfolio of Europe – market positions November 17 businesses across global corporate, commercial and Strong growth in net income for the first nine 2nd largest general insurer in Switzerland1 1 based on direct written premiums 2003 personal customer segments and geographical Source: Federal Office of Private Insurance months of 2004 to USD1,902 million is reported, 1 regions.