Company Reports

While over the first three months of the year, we believed Zurich Insurance Group's numbers showed a business lagging in most business units other than life, we think trailing performance has improved substantially to deliver better results over the first half.

Zurich Insurance is one of the best-quality companies in our European insurance coverage, and it is a truly unique business. The ownership of Farmers Management Services provides the company with an unusual uplift in returns delivered to shareholders. 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 the relationship will change because any change would have to be agreed upon by every single Farmers Exchanges policyholder. That would involve a lot of paperwork. FMS margins and returns touch 30%; in the world of insurance, that's almost unheard of.

Zurich Insurance is one of the best-quality companies in our European insurance coverage, and it is a truly unique business. The ownership of Farmers Management Services provides the company with an unusual uplift in returns delivered to shareholders. 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 the relationship will change because any change would have to be agreed upon by every single Farmers Exchanges policyholder. That would involve a lot of paperwork. FMS margins and returns touch 30%; in the world of insurance, that's almost unheard of.

Over the first three months of 2026, Zurich's first-quarter indicators show a business that we think is slightly lagging its main property and casualty and Farmers targets. In life insurance, the business looks slightly better on its ambitions.

Zurich Insurance is one of the best-quality companies in our European insurance coverage, and it is a truly unique business. The ownership of Farmers Management Services provides the company with an unusual uplift in returns delivered to shareholders. 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 the relationship will change because any change would have to be agreed upon by every single Farmers Exchanges policyholder. That would involve a lot of paperwork. Margins and returns in FMS touch 30%; in the world of insurance, that's almost unprecedented.

After Zurich Insurance and Beazley issued a joint statement on Feb. 4 this year, on an agreement in principle of the terms of Zurich's takeover of Beazley, terms have been agreed on, and Zurich has embarked on raising the financial means.

While Zurich Insurance has reported operating profit of $8.9 billion over 2025, a light beat versus our forecasts of $8.6 billion, we see some sluggish underlying performance in the business units, and the company seems a little off track on its targets for the next few years.

Zurich Insurance is one of the best-quality companies in our European insurance coverage, and it is a truly unique business. The ownership of Farmers Management Services provides the company with an unusual uplift in returns delivered to shareholders. 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 the relationship will change because any change would have to be agreed upon by every single Farmers Exchanges policyholder. That would involve a lot of paperwork. Margins and returns in FMS touch 30%; in the world of insurance, that's almost unprecedented.

On Feb. 4, 2026, Zurich Insurance and Beazley issued a joint statement outlining an agreement on terms in principle.

On Jan. 22, 2026, Beazley announced the board had unanimously rejected Zurich's GBP 12.8 per share cash takeover offer. It reasoned this significantly undervalues the long-term prospects of the company and is below the GBP 13.15 per share offer received from Zurich last June.

Zurich Insurance has announced it has submitted a proposal to the board of Beazley to acquire 100% of the company for GBP 12.80 per share, or GBP 8.2 billion.

Zurich Insurance is one of the best-quality companies in our European insurance coverage, and it is a truly unique business. The ownership of Farmers Management Services provides the company with an unusual uplift in returns delivered to shareholders. 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 because any change would have to be agreed upon by every single Farmers Exchanges policyholder. That would involve a lot of paperwork. Margins and returns in FMS touch 30%; in the world of insurance, that's unprecedented.

Zurich Insurance's current strategic cycle targets a few areas of growth, and based on the company's nine-month indicators, the business is marginally ahead of our forecasts for the next few years.

While Zurich Insurance has slightly missed company-compiled consensus estimates on the bottom line, it has delivered a slightly better business operating result. This has predominantly been driven by better results in property and casualty and Farmers, with a mid-single-digit miss in life.

In our look into European dividends for companies and stocks we prefer for 2025 earnings, we like Admiral, Munich, and Scor, but we prefer Scor over Munich based on its price/fair value ratio. We also think there is potential in Ageas.

Zurich Insurance is one of the best-quality companies in our European insurance coverage, and it is a truly unique business. The ownership of Farmers Management Services provides the company with an unusual uplift in returns delivered to shareholders. 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 because any change would have to be agreed upon by every single Farmers Exchanges policyholder. That would involve a lot of paperwork. Margins and returns in FMS touch 30%; in the world of insurance, that's almost unprecedented.

In Zurich's first-quarter 2025 indicators the business looks to be growing selectively within property and casualty insurance as rates continue to moderate and the business is growing to a lesser degree in terms of volume increases.

Zurich Insurance is one of the best-quality companies in our European insurance coverage, and it is a truly unique business. The ownership of Farmers Management Services provides the company with an unusual uplift in returns delivered to shareholders. 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 because any change would have to be agreed upon by every single Farmers Exchange policyholder. That would involve a lot of paperwork. Margins and returns in FMS touch 30%; in the world of insurance, that's almost unprecedented.

For full-year 2024 Zurich Insurance delivered business operating profit of $7.8 billion. This is ahead of consensus estimates collected by AWP Finanznachrichten AG and what we thought the business would achieve.

Zurich Insurance has raised its targets at its investor day, highlighting its ambitions for quality growth in Farmers, middle-market commercial, and protection in life. Being on track to exceed the existing plan has led Zurich to bring its next cycle forward one year.