When the pandemic hit in early 2020, insurers were pessimistic about the outlook, but they have remained profitable despite excluding COVID-19 from many policies and raising premiums.
Zurich, Europe's fifth-largest insurer, reported an above-forecast 35% increase in 2021 operating income to $5.7 billion, its highest level since 2007, aided by a strong performance from its commercial business and lower COVID-19 claims.
According to a company-compiled consensus forecast, operating profit was expected to be $5.5 billion.
"Both revenue and earnings are increasing." It will continue through 2022, and I expect it to continue at least until 2023."," CFO George Quinn said on a conference call with reporters after Zurich said it expected to meet or exceed its financial targets for 2022.
At 0905 GMT, Zurich's shares were little changed, compared to a 0.33 percent rise in European insurance stocks. Vontobel maintained its "hold" rating on the stock due to "elevated valuation multiples versus European and U.S. peers."
In November 2019, the insurer announced three-year goals, including increasing its target for business operating profit after tax return on equity to more than 14 percent from the previous goal of more than 12 percent. For 2021, the return on equity was 14 percent.
Zurich intends to sell more closed-to-new-customers life insurance books after announcing last month that it would release approximately $1.2 billion in capital by selling its Italian life and pensions back book to Portugal's GamaLife.
Zurich has already received interest in some of its German closed life books, but is not yet at the final offer stage, according to CEO Mario Greco, who added that a deal would take months to complete but would be "much larger" than the Italian sale.
Zurich proposed a dividend of 22 Swiss francs per share, a 10% increase over the previous year.