Investors intro pack 2018

Transcription

1 Investors intro pack 08 July 08 Zurich Insurance Group

2 GROUP Our proposition to investors HIGHLY CASH GENERATIVE BUSINESS MODEL SUPPORTING AN ATTRACTIVE AND GROWING DIVIDEND, SUPPORTED BY: A balanced and diverse global business Industry leading capital levels Stable, consistent and conservatively managed balance sheet Consistent growth with scope to enhance returns through capital re-deployment July 08 Investors' intro pack 08

3 GROUP One of few genuinely global insurers KEY FACTS A BALANCED GLOBAL BUSINESS USD 63bn total revenues USD 35bn total group and unit linked investments USD 3.8bn business operating profit (BOP) USD 3.0bn net income attributable to shareholders (NIAS) BOP BY BUSINESS (%) 3 34% 8% 38% Property & Casualty Life Farmers 6% SST regulatory solvency ratio 3% Zurich Economic Capital (Z-ECM) ratio calibrated to AA rating ( in 000 year event) USD 33bn shareholders equity BOP BY REGION (%) 3 5% % 7% 57% Europe North America (incl. Farmers) Asia Pacific Latin America USD 46bn market cap Values are for the full year 07 unless otherwise noted. Investments, solvency ratios, shareholders equity and market cap are as of December 3, 07. The Swiss Solvency Test (SST) ratio as of January, 08 is calculated based on the Group s internal model, which is subject to the review and approval of the Group s regulator, the Swiss Financial Market Supervisory Authority (FINMA). 3 BOP split by business excludes Group Functions and Operations, and Non-Core Businesses. BOP split by region excludes additionally Group Reinsurance. July 08 Investors' intro pack 08 3

4 GROUP Genuinely global franchise with distinct capabilities NORTH AMERICA EMEA #5 in commercial insurance # in crop insurance #4 insurance company overall # in P&C, #3 in life Top 3 #7 in US personal lines through Farmers Exchanges #8 in P&C, #6 in life #5 in P&C, # in life ASIA PACIFIC #5 in P&C, #4 in life 4 cross-border insurer to multinational corporations LATIN AMERICA #4 insurance company overall 3 #7 in P&C, #3 in life #0 in P&C, # in life #6 in P&C, # in life #0 in P&C 5 # in P&C, #9 in life #3 Global Travel Insurer Source: Axco, Company reports and presentations, local statistics (07 or most recent available), SNL Financial, Strategic Insight, Zurich internal data. Provided for informational purposes only. Zurich Insurance Group has no ownership interest in the Farmers Exchanges. Farmers Group, Inc., a wholly owned subsidiary of the Group, provides certain non-claims administrative and management services to the Farmers Exchanges as its attorney-in-fact and receives fees for its services. Estimate based on annual reports and investor presentations. 3 Pro-forma for the acquisition of the QBE operations in Argentina, Ecuador, Brazil, Colombia and Mexico. 4 # in individual Life, #6 in group life. Pro-forma for the acquisition of the Life insurance business of ANZ (OnePath Life). 5 Life business not among top 0. July 08 Investors' intro pack 08 4

5 GROUP Strong capital position and cash generation VERY STRONG FINANCIAL STRENGTH STRONG CAPITAL POSITION, Z-ECM (%) AA- / outlook stable Aa3 / outlook stable A+ (Superior) / outlook stable 40% 9% 0% 00% 03% 80% 60% FY-0 FY- 4% 7% % % 5% 3% 33% FY- FY-3 FY-4 FY-5 FY-6 FY-7 Q-8e Target Range HIGHLY CASH GENERATIVE, CASH REMITTANCE (USDbn) Z-ECM RATIO DEVELOPMENT (%) FY- 3.9 FY FY FY FY FY Property & Casualty Life Farmers Group Functions Non-Core Businesses IFRS NIAS 5% FY-6 % Business profit -% Insurance risk 0% Market risk % Market change -% Dividend accrual incl. anti dilution measures -% Other 3% FY-7 Q-8 Z-ECM reflects midpoint estimate with an error margin of +/- 5ppts. July 08 Investors' intro pack 08 5

6 GROUP Financial targets BOPAT ROE in excess of % and increasing, despite higher equity base USD.5bn in net savings by 09 compared to the 05 baseline Z-ECM target ratio of 00-0% Cash remittances in excess of USD 9.5bn over period BOPAT ROE target to be increased by ~50bps for OnePath Life acquisition on completion of transaction (as announced on December, 07). Business Operating Profit after tax return on equity, excluding unrealized gains and losses. July 08 Investors' intro pack 08 6

7 GROUP On track to deliver our targets BOPAT ROE (%).% >.0% Z-ECM RATIO (%) 33% 0% CUMULATIVE CASH REMITTANCES (USDbn) >9.5 00% 3.7 FY-7 Target Q-8e 3 Target range FY Target CUMULATIVE NET EXPENSE SAVINGS (USDm) USD 700m as of FY-7 Achieved % Target ~300 ~700 ~,00,500 Business Operating Profit after tax return on equity, excluding unrealized gains and losses. FY-7 adjusted for the impact of the hurricanes Harvey, Irma and Maria, charges related to the Group s restructuring recognized through BOP and the change to the UK capital gains tax indexation relief. BOPAT ROE target to be increased by ~50bps for OnePath Life acquisition on completion of transaction (as announced on December, 07). 3 Q-8 Z-ECM reflects midpoint estimate with an error margin of +/- 5ppts. July 08 Investors' intro pack 08 7

8 GROUP Continued delivery across all businesses P&C LIFE FARMERS EXCHANGES COMBINED RATIO (%) 00.9% reported BOP GROWTH (%) COMBINED RATIO (CR) (%) 98.%.6% 3.7% 98.% 3.% 3.8% +% 03.9% 7.% 0.6% 7.3% 65.7% 64.8% 96.8% 94.3% -.8% FY-6 -.4% FY-7 FY-6 FY-7 FY-6 FY-7 Cat ER AY LR ex-cat PYD Catastrophes CR excl. catastrophes LIKE-FOR-LIKE GWP GROWTH (%) FY-7 APE SHARE OF NON-TRADITIONAL PRODUCTS GWP GROWTH (USDm) 3 FY-5 3% 9,066 +3% 9,663 FY-6 FY-7-3% % UL, protection and Corporate Life & Pension 89% FY-6 FY-7 FY-7 adjusted for the impact of the hurricanes Harvey, Irma and Maria and the change to the UK capital gains tax indexation relief. Provided for informational purposes only. Zurich Insurance Group has no ownership interest in the Farmers Exchanges. Farmers Group, Inc., a wholly owned subsidiary of the Group, provides certain non-claims administrative and management services to the Farmers Exchanges as its attorney-in-fact and receives fees for its services. 3 Continuing operations only, excludes discontinued operations (st Century business outside of California and Hawaii mainly). July 08 Investors' intro pack 08 8

9 GROUP Indicative ROE development enhanced by OnePath life acquisition, US tax reform and capital return ILLUSTRATIVE BOPAT ROE DEVELOPMENT ~0.5% ~0.5% ~4% 0-%.%.5-% 0.5-% ~0.5% ~.75% % FY-7 Growth in equity base and market impacts Life & Farmers growth (incl. OnePath Life acquisition) 3 Loss ratio improvement Expense savings US tax Capital allocation / Other 09 Non-operating items NIAS ROE BOPAT ROE target to be increased by ~50bps for OnePath Life acquisition on completion of transaction (as announced on December, 07). FY-7 adjusted for the impact of the hurricanes Harvey, Irma and Maria, charges related to the Group s restructuring recognized through BOP and the change to the UK capital gains tax indexation relief. 3 Including expected impact of OnePath Life acquisition in Australia subject to regulatory approval. July 08 Investors' intro pack 08 9

10 GROUP We have strengthened our businesses, extracted capital from noncore portfolios and returned in 07 ~USD 3.8bn to shareholders MAIN DIVESTMENTS AND CAPITAL ACTIONS MAIN ACQUISITIONS TYPE OF DEAL BUSINESS STRATEGIC RATIONALE Skills Distribution Scale Sale of P&C business in Middle East Cover-More/ Halo M&A P&C Retail - Travel 07 Sale of P&C business in Taiwan Reinsurance of a closed annuity book Reinsurance of an individual Life risk portfolio 07 Standard Chartered D.A. OnePath (ANZ Life) M&A Life Retail Life Retail - Protection Sale of workplace pensions and savings business Sale of a MedMal legacy portfolio Bright Box M&A Connected cars Sale of a Singapore Life portfolio QBE Latam M&A P&C 08 Sale of Endsleigh 08 Travel Ace/ Universal Travel M&A P&C Retail - Travel Sale of NSW CTP run-off EuroAmerica M&A/P.T. Life Retail New South Wales Compulsory Third Party motor liability. D.A. = Distribution agreement. P.T. = Portfolio transfer. July 08 Investors' intro pack 08 0

11 Property & Casualty

12 PROPERTY & CASUALTY Leading commercial insurer, and one of the few genuinely global players FOOTPRINT FY-7 Gross Written Premiums by region (%) BUSINESS MIX FY-7 Gross Written Premiums by line of business (%) CUSTOMER UNITS FY-7 Gross Written Premiums by customer unit (%) 7% 8% 0% 3% USD 33.0bn 4% 3% USD 33.0bn 54% USD 33.0bn 46% 44% 7% 6% EMEA APAC Motor Special lines Commercial insurance Retail insurance North America Latin America Property Worker Injury Liability The split by region or customer unit excludes Group Reinsurance and Eliminations. July 08 Investors' intro pack 08

13 PROPERTY & CASUALTY We have stabilized our P&C business and show continuous improvement in the P&C combined ratio AY LOSS RATIO EXCLUDING CATASTROPHES (%) OTHER UNDERWRITING EXPENSE (OUE) RATIO (%) 3 COMMISSION RATIO (%) 3-3.4ppts 68.% 65.7% 64.8% 6.% -.8ppts 5.4% 4.% 4.0% +.8ppts 4.7% 5.9% FY-5 4 FY-6 FY-7 Cat 3.5%.6% 5.8% FY-5 4 FY-6 FY-7 FY-5 4 FY-6 FY-7 PYD 0.% -.8% -.4% Accident year loss ratio (AY LR) excludes prior year reserve development (PYD). Catastrophes include major and mid-sized catastrophes including significant weather-related events. FY-7 adjusted for the impact of the hurricanes Harvey, Irma and Maria. 3 Expense ratio also includes the insurance premium tax (i.e.,.6% for the years in scope), not shown in this page. 4 FY-5 has not been restated. July 08 Investors' intro pack 08 3

14 PROPERTY & CASUALTY Combined ratio and BOP improved strongly COMBINED RATIO SPLIT (%) 03.6% 3.7% -5.4ppts 98.% 3.7% 3.8% BOP SPLIT (USDm) 00.9% reported USD,546m reported 98.% 864 0, , %.6% 3.%,00,89, % 65.7% 64.8% ,00 0.% -.8% -.4% FY-5 FY-6 FY-7 FY-5 FY-6 FY-7 Non-controlling interest Realized capital gains Underwriting result Expense Ratio Catastrophes AY LR (excl. catastrophes) 3 PYD Non-technical result Investment income FY-5 has not been restated. FY-7 adjusted for the impact of the hurricanes Harvey, Irma and Maria and charges related to the Group s restructuring recognized through BOP. Catastrophes include major and mid-sized catastrophes, including significant weather related events. 3 Accident year combined ratio (AY CR) excludes prior year reserve development (PYD). July 08 Investors' intro pack 08 4

15 PROPERTY & CASUALTY Reinsurance program in line with Group risk appetite GROUP CATASTROPHE REINSURANCE PROTECTION (USDm) Europe all perils US all perils (excl. EQ) US earthquakes Rest of World all perils Global aggregate cat treaty Global aggregate cat treaty Combined global cat treaty US wind swap Global cat treaty Regional cat treaties Retention 0% co-participation Europe cat treaty calculated with EUR/USD exchange rate as of December 3, 07. This USD 00m cover can be used only once, either for aggregated losses or for an individual occurrence or event. 3 Franchise deductible of USD 5m, i.e., losses greater than USD 5m count towards erosion of the retention (annual aggregate deductible). July 08 Investors' intro pack 08 5

16 PROPERTY & CASUALTY Our reinsurance has been effective in protecting earnings and reducing earnings volatility Q3-7 NET IMPACT FROM SIGNIFICANT CAT (USDbn) LARGE LOSS VOLATILITY U.S. P&C market share (%) % of HY-7 Shareholders equity AIG /05 8ppts Chubb Allstate Zurich 0.7. Q-4 Q-4 Q3-4 Q4-4 Q-5 Q-5 Q3-5 Q4-5 Travelers 0.7 QBE /07 Allianz < ppts Hartford Harvey Irma Maria Mexico EQ Other Total Q-6 Q-6 Q3-6 Q4-6 Q-7 Q-7 Q3-7 Q4-7 Impacts are net of reinsurance and pre-tax. Source: Company reports, AM Best, IR analysis. Based on FY 06 Direct Written Premiums (excluding accepted reinsurance), including Retail and Commercial business. July 08 Investors' intro pack 08 6

17 Life

18 LIFE Our Life business is where others want to be; low risk and focused on protection and unit-linked business FOOTPRINT FY-7 Annual premium equivalent by region (%) BUSINESS MIX FY-7 Annual premium equivalent by line of business (%) Savings & Annuity Unit Linked % 6% DISTRIBUTION MIX FY-7 Annual premium equivalent by pillar (%) 4% 5% 3% USD 4.9bn 68% Corporate Pensions 9% 35% Protection 8% USD 4.9bn 40% FY-7 Technical reserves by line of business (%) 3% Traditional & Other 4% EMEA APAC 59% Unit-Linked & Savings Corporate Life & Pensions Others North America Latin America Banks July 08 Investors' intro pack 08 8

19 LIFE Revenue streams have low market dependency DRIVERS OF OUR IFRS PROFITABILITY (USDm) REVENUES Loadings & fees, ,483 Policy charges and fees mainly designed to cover distribution costs Investment margin 64 Returns on our assets, plus share of returns on policyholder assets Technical margin 946 Revenues on mortality and other risk products, after allowing for claims costs EXPENSES Operating costs -,38 The costs we incur running the business Acquisition costs -,488 What we pay to distributors OPERATING PROFIT Deferral impacts 77 FY-7 BOP,380 Accounting adjustment to spread distribution costs over policy terms UL fund based fees July 08 Investors' intro pack 08 9

20 LIFE Focus on translating new business growth into tangible measures of value NEW BUSINESS VALUE (USDm) GLOBAL LIFE BOP (USDm) +9% likefor-like USD,58m reported +8% +% , , , FY-5 FY-6 FY-7-4 FY FY-6 - FY-7 Other Latin America APAC North America EMEA Other Latin America APAC North America EMEA Like-for-like excludes Australia and Malaysia Takaful acquisitions. FY-7 adjusted for the impact of charges related to the Group s restructuring taken through BOP and the change to the UK capital gains tax indexation relief. July 08 Investors' intro pack 08 0

21 Farmers

22 FARMERS A unique structure MAINLY A FEE BUSINESS TO ZURICH FARMERS UNIQUE STRUCTURE The Farmers Exchanges are a group of US insurance companies, which are owned by their policyholders Zurich owns Farmers Management Services (FMS), which manages the Farmers Exchanges on behalf of the policyholders in an arrangement known as an attorney-in-fact FMS receives fees from Farmers Exchanges for the services it provides Farmers Group, Inc. Provides administration and management Zurich owned Services Fees as % of Premiums Farmers Exchanges Bear underwriting risk and handle claims Own distribution assets Policyholder owned The fee based nature of the business model allows FMS to generate stable earnings and high cash remittances FARMERS BOP HISTORY (USDm) Farmers Life manufactures life products sold through the Farmers distribution channels Zurich also provides capital support to the Farmers Exchanges through Farmers Re,40,48-6 FY-,56 5,390 FY-3,573 90,383 FY-4,4 6,360 FY-5,7 4 0,478 FY-6, ,45 FY-7 Farmers Life FRe FMS Provided for informational purposes only. Zurich Insurance Group has no ownership interest in the Farmers Exchanges. Farmers Group, Inc., a wholly owned subsidiary of the Group, provides certain non-claims administrative and management services to the Farmers Exchanges as its attorney-in-fact and receives fees for its services. With the full year 06, Farmers Life business was moved from Life to Farmers, to reflect new management structure. July 08 Investors' intro pack 08

23 FARMERS EXCHANGES Leading player in US personal lines insurance PROFILE Farmers Exchanges is the #3 personal lines insurer in 9 core states in the Western US Split of business is predominantly personal lines, with some commercial lines product offerings for small businesses US PERSONAL LINES MARKET 07 Personal Lines Direct Premiums of USD 35bn 8% 9% Homeowners Auto Liability Auto Physical Damage Primary distribution through ~3,500+ Exclusive Agents, under Farmers brand Growing business in Eastern US 43% PERSONAL LINES MARKET SHARE (%) Based on 07 Personal Lines Direct Premiums of USD 35bn 8.3 State Farm Berkshire Allstate Progressive USAA Liberty Farmers Nationwide Mutual FARMERS PREMIUM SPLIT FY-7 Gross Written Premiums of USD 9.9bn % 0% % 7% 50% Auto/Personal Umbrella Homeowners Business Insurance Specialty Discontinued / Other See footnote on slide. SNL data for 07, as of April 0, 08 - Personal lines defined as auto and homeowners multi peril for United States excluding territories. July 08 Investors' intro pack 08 3

24 FARMERS EXCHANGES Farmers vast distribution system FOCUS IS ON EXCLUSIVE AGENTS 35,000 exclusive agents, district managers and licensed staff 34,00 independent agents,06 Farmers branded storefronts Direct & Affinity Partners See footnote on slide. July 08 Investors' intro pack 08 4

25 FARMERS EXCHANGES Customer centered, agent powered NET PROMOTER SCORE SURVEY RESPONSES (%) ~K LOCAL STOREFRONTS ~4K DIGITAL STOREFRONTS Average NPS 77% Extremely satisfied with their agent +7 BROAD PRODUCT SUITE 3% Other -43 See footnote on slide. Life, Pet and Financial products administered by Farmers Life and third party servicers. July 08 Investors' intro pack 08 5

26 FARMERS EXCHANGES Improving underlying performance at the Farmers exchanges with top-line growth GWP GROWTH (%) COMBINED RATIO (%) SURPLUS (USDbn) 3.6% 5.% 3.3% 3.% 99.4% 5.% 0.9% 6.0% 03.9% 7.% 0.6% 7.3% 38.5% % % % 5.5.4% 94.% 95.9% 96.8% 94.3%.0% 0.0% FY-4 FY-5 FY-6 FY-7 FY-4 FY-5 FY-6 FY-7 FY-4 FY-5 FY-6 FY-7 Continuing Operations Total Catastrophe losses CR (excl. catastrophe losses) Surplus ratio Farmers Exchanges surplus See footnote on slide. Excludes st Century business outside of California and Hawaii reflecting the decision made in October 05 to retire the st Century brand from all states excluding California and Hawaii and other discontinued operations. July 08 Investors' intro pack 08 6

27 FARMERS EXCHANGES Significant opportunities for growth OPPORTUNITY TO DEEPEN CUSTOMER PENETRATION (FARMERS HOUSEHOLDS BY PRODUCT) ACTIVATION OF AGENTS FOR SME OPPORTUNITY (PERCENTAGE OF AGENTS, GWP) EXPANSION INTO EASTERN UNITED STATES (GWP, USDm) 3 or more lines of business 5% % 53% Monoline lines of business 3% 6% Exclusive agents Business Insurance GWP FY- FY- FY-3 FY-4 FY-5 FY-6 FY-7 See footnote on slide. As of FY-7 Eastern expansion states include Connecticut, Georgia, Maryland, New Jersey, New York, and Pennsylvania. July 08 Investors' intro pack 08 7

28 Investment and Capital Management

29 INVESTMENT AND CAPITAL MANAGEMENT ALM-focused and lower risk strategy delivering consistent and sustainable excess returns ASSET ALLOCATION FY-7 total Group investments of USD 07bn ASSET QUALITY FY-7 Group debt investments of USD 63bn DURATION As of FY-7, for fixed income investments only (#years) 3% 7% 5% % 5% 5% 4% % 7% % 7% 5% Life P&C Fixed income Equities AAA BBB Mortgages Hedge funds, Private equity AA Non-investment grade Assets Liabilities Real estate Cash A Unrated July 08 Investors' intro pack 08 9

30 INVESTMENT AND CAPITAL MANAGEMENT Managing our risks conservatively to AA financial strength GROUP SOLVENCY CAPITAL MANAGEMENT POLICY (Z-ECM RATIO, %) 40% 00% 85% 7% 96% 89% 04% 6% >40% Mitigating actions required 60% 0% 4% 80% FY- 7% FY-3 % FY-4 % FY-5 5% FY-6 3% 33% at Q-8 FY-7 0%-40% 00%-0% 90%-00% <90% 0%- 40% 00%- 0% Mitigating actions considered Target range Within tolerance level on temporary basis Below tolerance level, action required SST Z-ECM The Swiss Solvency Test (SST) ratio as of January, 08 is calculated based on the Group s internal model, which is subject to the review and approval of the Group s regulator, the Swiss Financial Market Supervisory Authority (FINMA). 05 and prior years not restated for latest methodology and model changes. Q-8 Z-ECM reflects midpoint estimate with an error margin of +/- 5ppts. July 08 Investors' intro pack 08 30

31 INVESTMENT AND CAPITAL MANAGEMENT Solvency ratios resilient to market movements Z-ECM SENSITIVITY IMPACT, SST SENSITIVITY IMPACT, Actual value as of FY-7 3% Interest rate +00 bps 36% Actual value as of FY-7 6% Interest rate +00 bps 3% Interest rate -00 bps % Interest rate -00 bps 95% USD appreciation +0% 35% USD appreciation +0% % Equities +0% 36% Equities +0% % Equities -0% 8% Equities -0% 09% Credit spreads +00 bps 3 6% Credit spreads +00 bps 3 89% CS excl. Euro sovereign +00 bps 3 % CS excl. Euro sovereign +00 bps 3 97% Sensitivities are best estimate and linear, i.e. will vary depending on prevailing market conditions at the time. Z-ECM is calibrated at 99.95% Value at Risk (equivalent to an AA rating); SST is calibrated at 99.0% Expected Shortfall. The impact of the changes to the required capital is approximated and takes into account market and insurance risks. 3 Credit Spreads (CS) include mortgages and including/excluding Euro sovereign spreads. Z-ECM sensitivity is net of profit sharing with policyholders. July 08 Investors' intro pack 08 3

32 INVESTMENT AND CAPITAL MANAGEMENT Proven balance sheet flexibility through leverage and coverage at Aa levels GROUP CAPITAL STRUCTURE MOODY S LEVERAGE & COVERAGE Financial leverage: Aa = 5-30% 3% 4% % 3% % 4% 9% 9% 9% 6% 6.9% 4.3% 4.% 6.4% 3.7% Earnings coverage: Aa = 8-x 7% 76% 76% 73% 75% Senior debt Subordinated Debt Shareholders Equity Capital Structure shown using accounting view. Estimated by Zurich. July 08 Investors' intro pack 08 3

33 INVESTMENT AND CAPITAL MANAGEMENT Low cost of risk and balanced maturity profile CDS SPREAD AMONG BEST OF PEERS (USDm) BALANCED REFINANCING NEEDS (USDbn) Jan-0 Jan- Jan- Jan-3 Jan-4 Jan-5 Jan-6 Jan-7 Jan Zurich Axa Generali Allianz Senior Subordinated 5yEUR sub CDS; source: Bloomberg. As of Q 08; maturity profile based on first call date for subordinated debt and maturity date for senior debt. July 08 Investors' intro pack 08 33

34 INVESTMENT AND CAPITAL MANAGEMENT We have a strongly cash generative business reflected in high cash remittance NET INCOME AND REMITTANCES 0-07 (USD) P&C LIFE FARMERS NON-CORE GFO GROUP NIAS 0-7.0bn 6.bn 6.3bn 0.3bn -4.9bn 9.9bn REMITTED 0-7.5bn 4.4bn 6.6bn.0bn Ø PAYOUT 04% 7% 03% nm 95% ~90% ~70% ~90% ~90% ~85% Based on 0-7 reporting structure. Group Functions and Operations. July 08 Investors' intro pack 08 34

35 INVESTMENT AND CAPITAL MANAGEMENT We are focused on continuing to reward our shareholders ZURICH S DIVIDEND POLICY DIVIDEND PER SHARE (CHF) NIAS payout ratio of approximately 75% Dividend increases based on sustainable earnings growth Target minimum of prior year dividend per share Dividend USD/CHF EUR/CHF Based on exchange rates around respective dividend payment dates. July 08 Investors' intro pack 08 35

36 INVESTMENT AND CAPITAL MANAGEMENT Long term value creation, driven by consistent dividend policy 00% 50% 00% 50% 0% STOXX Europe 600 Insurance Zurich Insurance Group Source: Thomson Reuters July 08 Investors' intro pack 08 36

37 Appendix

38 INVESTMENT AND CAPITAL MANAGEMENT Z-ECM and SST are more conservative than Solvency II PRIMARY DIFFERENCES REQUIRED CAPITAL Most onerous impact on ratio Z-ECM SST Solvency II (Pillar ) RISK MEASURE VaR 99.95% (~AA) ES 99% (~BBB) VaR 99.5% (~BBB), usually < ES 99% RISK-TYPES COVERED Market Risk (including investment credit) Premium and Reserve Risk NatCat Risk Life Liability Risk Business Risk Operational Risk Reinsurance Credit Risk Market Risk (including investment credit) Premium, Reserve and UPR Risk NatCat Risk Life Liability Risk Life Business Risk Reinsurance Credit Risk Receivables Credit Risk Internal model (ZIP): Market Risk (including investment credit) Premium, Reserve and UPR Risk NatCat Risk Business Risk Operational Risk Reinsurance Credit Risk Receivables Credit Risk Scenarios Standard Formula (all other entities): Market risk Counterparty default risk Life underwriting risk Health underwriting risk Non-life underwriting risk (including premium, reserve and NatCat) Intangible asset risk Operational risk EQUIVALENCE No concept of equivalence, ZECM applied to the entire Group Possibility to use local regimes for subsidiaries in equivalent third countries. Not applicable for Zurich Regarding Swiss Solvency Test (SST) ratio see footnote on slide 3. July 08 Investors' intro pack 08 38

39 INVESTMENT AND CAPITAL MANAGEMENT Z-ECM and SST are more conservative than Solvency II PRIMARY DIFFERENCES YIELD CURVES AND TRANSITIONALS Most onerous impact on ratio BASE RISK-FREE YIELD-CURVE ENTRY-POINT TO EXTRAPOLATION OF YIELD-CURVE ULTIMATE FORWARD RATE ADJUSTMENTS TO YIELD-CURVE Z-ECM / SST, Swaps Use all available market data CHF: 30 years EUR, USD, GBP: 50 years Flat extrapolation from last observable data point None (no liquidity premium) Solvency II (Pillar ) Swaps CHF: 5 years EUR: 0 years USD, GBP: 50 years CHF: 3.% (as of December 3, 07) EUR, USD, GBP: 4.% (as of December 3, 07) -0bps (credit) + volatility adjustment (between 9 bps (CHF) and 78bps (USD) at Q4-6) + matching adjustment (currently not used by Zurich) TRANSITIONAL REQUIREMENTS n/a Various transitional measures, especially for yield-curves and technical provisions, lasting until 03. Zurich does not make use of these. Regarding Swiss Solvency Test (SST) ratio see footnote on slide 3. We applied for usage of our own yield curves in the SST, which was granted by FINMA subject to certain conditions. July 08 Investors' intro pack 08 39

40 INVESTMENT AND CAPITAL MANAGEMENT Z-ECM and SST are more conservative than Solvency II PRIMARY DIFFERENCES OTHER KEY ELEMENTS Most onerous impact on ratio Z-ECM SST Solvency II (Pillar ) SENIOR DEBT Available Capital Liability Liability TAX Pre-tax Pre-tax Post-tax GRANULARITY Management view Internal reinsurance not relevant Full Group diversification taken into account and allocated back to business units Legal entity view Internal reinsurance considered Only legal entity diversification taken into account Risk of subsidiaries included (with limited liability) Legal entity view Internal reinsurance considered Only legal entity diversification taken into account RISK MARGIN Risk Margin as part of insurance liabilities Risk Margin as part of insurance liabilities Risk Margin as part of insurance liabilities Regarding Swiss Solvency Test (SST) ratio see footnote on slide 3. July 08 Investors' intro pack 08 40

41 Disclaimer Certain statements in this document are forward-looking statements, including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives of Zurich Insurance Group Ltd or the Zurich Insurance Group (the Group ). Forward-looking statements include statements regarding the Group s targeted profit, return on equity targets, expenses, pricing conditions, dividend policy and underwriting and claims results, as well as statements regarding the Group s understanding of general economic, financial and insurance market conditions and expected developments. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results and plans and objectives of Zurich Insurance Group Ltd or the Group to differ materially from those expressed or implied in the forward looking statements (or from past results). Factors such as (i) general economic conditions and competitive factors, particularly in key markets; (ii) the risk of a global economic downturn, in the financial services industries in particular; (iii) performance of financial markets; (iv) levels of interest rates and currency exchange rates; (v) frequency, severity and development of insured claims events; (vi) mortality and morbidity experience; (vii) policy renewal and lapse rates; and (viii) changes in laws and regulations and in the policies of regulators may have a direct bearing on the results of operations of Zurich Insurance Group Ltd and its Group and on whether the targets will be achieved. Zurich Insurance Group Ltd undertakes no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise. All references to Farmers Exchanges mean Farmers Insurance Exchange, Fire Insurance Exchange, Truck Insurance Exchange and their subsidiaries and affiliates. The three Exchanges are California domiciled interinsurance exchanges owned by their policyholders with governance oversight by their Boards of Governors. Farmers Group, Inc. and its subsidiaries are appointed as the attorneys-in-fact for the Farmers Exchanges and in that capacity provide certain non-claims administrative and management services to the Farmers Exchanges. Neither Farmers Group, Inc., nor its parent companies, Zurich Insurance Company Ltd and Zurich Insurance Group Ltd, have any ownership interest in the Farmers Exchanges. Financial information about the Farmers Exchanges is proprietary to the Farmers Exchanges, but is provided to support an understanding of the performance of Farmers Group, Inc. and Farmers Reinsurance Company. It should be noted that past performance is not a guide to future performance and that interim results are not necessarily indicative of full year results. Persons requiring advice should consult an independent adviser. This communication does not constitute an offer or an invitation for the sale or purchase of securities in any jurisdiction. THIS COMMUNICATION DOES NOT CONTAIN AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES; SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR EXEMPTION FROM REGISTRATION, AND ANY PUBLIC OFFERING OF SECURITIES TO BE MADE IN THE UNITED STATES WILL BE MADE BY MEANS OF A PROSPECTUS THAT MAY BE OBTAINED FROM THE ISSUER AND THAT WILL CONTAIN DETAILED INFORMATION ABOUT THE COMPANY AND MANAGEMENT, AS WELL AS FINANCIAL STATEMENTS. July 08 Investors' intro pack 08 4

42 Investing into Zurich SIX SWISS EXCHANGE Listing: SIX Swiss Exchange, Switzerland Product type: Swiss Blue Chip Shares Ticker symbol: ZURN Swiss security number (Valorennummer): ISIN: CH Bloomberg symbol: ZURN VX Equity Reuters symbol: ZURN.VX Trading currency: CHF US AMERICAN DEPOSITARY RECEIPT PROGRAM Depository: The Bank of New York Mellon Nature: ADR Symbol: ZURVY For further information: in the USA BNY-ADRS outside the USA shrrelations@bnymellon.com Website July 08 Investors' intro pack 08 4

43 For further information CALL US VISIT OR FOLLOW US Investor Relations Richard Burden Francesco Bonsante Samuel Han Gianni Vitale Rating Agency Management Michèle Matlock Events Patricia Heina Investor Relations website Financial results and reports Follow us Phone +4 (0) investor.relations@zurich.com July 08 Investors' intro pack 08 43

44 CALENDAR: August 9, 08, Half year results 08 September 6-7, 08, UBS Best of Switzerland Conference 08, Opfikon-Glattbrugg September 5-6, 08, Bank of America Merrill Lynch Conference 08, London November 8, 08, Update for the nine months ended September 30, 08 December 5, 08, Investor Day 08 Insurance Company Ltd