Zurich Insurance hit by Covid-19 amid rising commercial insurance rates

Insurers have been hit across the board by pandemic-related claims including for travel, business interruption, and event cancellation, in addition to life insurance. Picture: File picture

Zurich Insurance’s life insurance and property and casualty businesses have taken a hit from the Covid-19 pandemic, but rising commercial insurance rates will provide support, its CFO said as the company reported a 40% profit drop.

Insurers have been hit across the board by pandemic-related claims including for travel, business interruption, and event cancellation, in addition to life insurance.

“It’s been a relatively extraordinary six months,” chief financial officer George Quinn said. 

“The challenge is not over,” he said.

Europe’s fifth-largest insurer said it expected Covid-19 related insurance claims at its property and casualty business to be $750m (€637m) for the full year, the same level it indicated in May.

Zurich’s first-half business operating profit fell 40% to $1.7bn, hit by payouts linked to the pandemic and weaker financial markets. 

The company said the coronavirus outbreak had reduced its operating profit by $686m. 

In addition, claims related to civil unrest, mainly in the US, totalled $122m, Mr Quinn said.

The port warehouse explosion in Beirut last week was not likely to represent a major loss for the insurer, he said. 

Zurich said its commercial insurance rates rose 8% in the first six months, but Mr Quinn said rises accelerated in the second quarter and the trend was “really positive”. 

Reuters