Zurich Insurance Reports Strong Farmers Growth

Zurich Insurance reported strong growth in its Farmers division for the first quarter, with its gross written premium up to $6,883 million, a rise of 29%. While that increase does include the contribution from MetLife, that inclusion only accounts for 17 percentage points of the rise. This rise in premium led to a nice bump in the fee and income of Farmers Management Services, which rose to $1,106 million, a climb of 21%, broadly in line with premium earned on the exchanges. Performance of the property-casualty division also looked good, increasing gross written premium by 8%. That was accompanied by low- to high-single-digit rate changes through all four geographies, though most of those rates changes are expected to moderate. The regional rise in gross premium was buoyed by currency and strong performance in crop insurance in the United States. The division that dragged down indicators was life, with new business value showing a 10% decline. We think this is down to an increased mix of capital-efficient product sales. We maintain our fair value estimate and our narrow economic moat rating.