Zurich Is a Rare Structurally Advantaged Multiline Insurer With a Narrow Moat

Zurich Insurance is one of the best-quality companies in our European insurance coverage, and it is a truly special business. The ownership of Farmers Management Services provides the company with an unusual uplift to returns delivered to shareholders. And we believe this business and these returns are well protected by the long-standing attorney-in-fact agreement. The relationship between Farmers Exchanges and Farmers Management Services has been in place since the exchanges were founded nearly 100 years ago. This makes it unlikely that the relationship will change and any change would have to be agreed by every single Farmers Exchange policyholder. That would involve a lot of paperwork. Margins and returns in FMS touch 30%, almost unrivaled in the world of insurance.