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Zurich Insurance Group AG ZURN

Morningstar Rating
CHF 444.10 −2.20 (0.49%)
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Company Report

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.

Price vs Fair Value

ZURN is trading at a 8% discount.
Price
CHF 453.80
Fair Value
CHF 782.00
Uncertainty
Low
1-Star Price
CHF 351.15
5-Star Price
CHF 737.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Zurich’s Farmers Management Services is a low capital requirement, high margin, stable, and wide-moat intangible asset business.

Bears

Zurich is underweight midmarket commercial insurance versus some North American peers.

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News

Trading Information

Previous Close Price
CHF 446.30
Day Range
CHF 443.50447.80
52-Week Range
CHF 401.70492.90
Bid/Ask
CHF 444.00 / CHF 444.20
Market Cap
CHF 63.95 Bil
Volume/Avg
41,344 / 320,123

Key Statistics

Price/Earnings (Normalized)
13.70
Price/Sales
1.06
Dividend Yield (Trailing)
5.83%
Dividend Yield (Forward)
5.83%
Total Yield
8.51%

Company Profile

Zurich is a multiline insurer that writes business across both life and non-life insurance and also owns Farmers Management Services. The company was founded in 1872, originally as a marine reinsurer, to provide reinsurance to its parent company. Zurich subsequently expanded into transport and accident insurance and then rode the wave of transport technology innovation that drove rising demand for insurance. One of Zurich’s early principles was that setting prices too low would result in unfair claims handling that would be damaging to both customers and Zurich. Over the years Zurich has sought to combine goodwill in claims with a sufficient premium. Zurich is one of the most successful insurers in Europe.
Sector
Financial Services
Industry
Insurance - Diversified
Stock Style Box
Large Core
Total Number of Employees
59,593

Competitors

Valuation

Metric
ZURN
ALV
AXAHY
Price/Earnings (Normalized)
13.7012.1510.19
Price/Book Value
3.131.811.49
Price/Sales
1.061.040.88
Price/Cash Flow
5.3399.40
Price/Earnings
ZURN
ALV
AXAHY

Financial Strength

Metric
ZURN
ALV
AXAHY
Quick Ratio
Current Ratio
Interest Coverage
15.1615.59
Quick Ratio
No chart available

Profitability

Metric
ZURN
ALV
AXAHY
Return on Assets (Normalized)
1.37%0.99%1.19%
Return on Equity (Normalized)
19.33%16.92%16.11%
Return on Invested Capital (Normalized)
11.85%15.62%6.80%
Return on Assets
ZURN
ALV
AXAHY
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Insurance - Diversified Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
BRK.A
Berkshire Hathaway Inc Class AZzmygzpxvdKmqyt$883.9 Bil
BRK.B
Berkshire Hathaway Inc Class BYnbnvhkqdhQyzy$878.0 Bil
ALIZY
Allianz SE ADRVpghjxnccVspq$111.7 Bil
AXAHY
AXA SA ADRFbrjbvnvFgshv$81.6 Bil
ZURVY
Zurich Insurance Group AG ADRSmhxzrjnWqdywk$70.5 Bil
AIG
American International Group IncJsgcxhpsmJrk$50.5 Bil
SLF
Sun Life Financial IncVbbhknyqGmpn$30.1 Bil
AVVIY
Aviva PLC ADRVypjkwgfVstd$15.7 Bil
AEG
Aegon Ltd ADRThcjcrlDpfwv$10.9 Bil
AGESY
Ageas SA/ NV ADRXlwhkMwq$8.6 Bil

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