Zurich American Insurance Company AA (Superior)

 

Zurich American Insurance Company AA (Superior)

zurich american insurance company am best

Whether you have a car, a home, or even a small business, you will need to find the best company to insure your property. The best companies for insurance are the ones that have a high rating for their Asset quality, Balance sheet strength, and Claims paying ability.

Financial strength rating

Founded in 1899, AM Best is a leading global credit rating agency that focuses on the insurance industry. Its ratings are independent and provide a quantified assessment of an insurer's financial health. The ratings are assigned based on a range of quantitative and qualitative criteria. They are designed to reflect the insurer's financial strength and ability to meet policyholder obligations.

Zurich's financial strength rating reflects its strong balance sheet and a diversified earnings profile. Its non-life business has improved in recent years, driven by favorable pricing conditions and strong underwriting discipline. Moreover, Zurich's balance sheet strength is underpinned by strong risk-adjusted capitalisation, good financial flexibility and access to financial markets. In addition, Zurich has a solid capital position with hybrid debt, the value of its in-force life business and other soft capital components.

AM Best expects Zurich to continue to achieve strong operating performance. The group's property/casualty operations have also experienced a positive turnaround. Its underwriting discipline and material cost reduction have contributed to a sustainable improvement in P/C profitability metrics. In addition, the group's non-life business mix is shifting towards less volatile lines of business.

Zurich's ratings also reflect its strong position in Europe and Latin America. Its competitive advantages in these markets are sustained. Moreover, Zurich's non-life business is characterized by a strong product portfolio and a diversified earnings profile. In addition, the group has selective positions in Asia Pacific.

Claims-paying ability rating

Whether you are considering a Zurich North America career move or are a long time employee, you may be interested in a Zurich American Insurance Company A+ (Superior) rating. This grade is the result of the combined efforts of the company's US and global business units. The rating is the result of a combination of factors, such as the company's size and scope, the amount of revenue generated by the business, and the quality of the service and customer relations delivered by the business. It is also the result of Zurich's global corporate culture and ethos.

The A+ (Superior) rating is not a perfect score, however. There are several reasons for this, including the company's recent financial re-positioning. The company is now a stronger and more efficient organization, and the company's recent acquisition of AXA Insurance Company is a boon to the company's US business. The acquisition of AXA Insurance Company is expected to boost the company's US operating income by more than ten percent, which will enable Zurich to continue its growth and expansion plans in the US. As of November 2021, the company is on track to reach its ambitious revenue targets.

The best part of this is that the company is able to continue delivering a superior customer experience. Zurich North America employs a highly trained workforce that has been rated one of the best in the industry by numerous research organizations.

Asset quality rating

AA Zurich is the ilk of Zurich Reinsurance (U.S.) and American Guarantee & Liability Insurance Co., and is well-positioned to capitalize on the insurance industry's latest regulatory developments. Its property and casualty performance has been upgraded and its life operations continue to perform well. Despite the challenges posed by an aging population, Zurich's robust capital position will stand it in good stead over the next five years.

A tally of the company's key metrics reveals that the AA Zurich American Insurance Company is the king of the insurance pack in the United States. Its competitive position in the US is bolstered by a strong presence in the U.S. and Canada, as well as in Latin America and the Asia Pacific region. Zurich's US operations also feature a competitive life insurance franchise in the form of Farmers Exchanges, one of the largest mutual insurance groups in the country.

Zurich's balance sheet strength is underpinned by a sound funding profile, prudent reserving practices and a sound risk management strategy. Despite the company's relatively high premiums, it is well-capitalised and has been able to ride out a number of market downturns, including the 2008 financial crisis. The company's balance sheet strength will be further enhanced by the disposal of a small but important part of the German and Italian life insurance back books.

The company's best asset is its proprietary reinsurance technology. This technology has enabled the company to build a strong balance sheet and mitigate the effects of the Great Recession. The company's prudent reserving and prudent risk management will also stand it in good stead as it tries to navigate the inflationary pitfalls that have plagued the insurance industry since the Great Recession.

Balance sheet strength

Despite the continuing uncertainty surrounding the macroeconomic environment, AM Best believes that Zurich's strong balance sheet strength, appropriate risk-adjusted capitalisation and asset-liability management will support the company through the coming years. The ratings also note Zurich's "impressive turnaround" of its property and casualty operations. The company's recently realigned reinsurance program has softened the impact of catastrophe losses.

Zurich's operating performance is supported by the group's ability to achieve consistent fee-based income from Farmers Exchanges. The group also has a diversified investment portfolio. Moreover, its investment performance has been improving over the past five years.

The group's operating results are also supported by its high use of reinsurance through highly-rated unaffiliated entities. This has helped the group maintain a relatively flat premium trend. The group also generates risk-free income from non-claims management services for Farmers Exchanges.

The group's underwriting results have also improved in line with global peers. However, the property/casualty portfolio has also been impacted by North American catastrophe losses. The company recently made a number of adjustments to its reserving practices and adjusting reserves for inflationary pressures.

AM Best also affirmed the "aa-" long-term issuer credit rating of the Zurich Insurance Group's main-rated insurance subsidiaries, Zurich Insurance PLC and Fidelity & Deposit Co. of Maryland. These subsidiaries are supported by strong balance sheet strength, risk-adjusted capitalization and appropriate enterprise risk management.

AM Best expects Zurich's balance sheet sensitivity to market risk to be largely reduced after the sale of the Group's life insurance back books. It also expects the group's soft capital reliance to decline.

Operational performance

Among the various insurance groups out there, Zurich is a top-tier competitor. The company is a well-diversified player with excellent product and geography diversification. It has a solid balance sheet that is underpinned by a slew of risk-adjusted capitalisation measures. Among its other strengths, the company has demonstrated a strong track record in the capital markets.

The company has a solid track record in the property and casualty (P/C) business, having made significant improvements to its P/C profitability metrics over the past five years. The company also boasts a strong balance sheet as evidenced by its impressive hybrid debt portfolio. It has also demonstrated access to the capital markets with a slew of recent financings. In particular, the company has been able to leverage its good financial flexibility to generate liquidity from the capital markets.

The company's property/casualty business has made its mark, with material cost reduction leading to improved profitability. The company also has a strong presence in the Asian market and maintains a robust position in Latin America. In particular, the company's recent acquisition of Farmers Exchanges, a leading mutual insurer in the U.S., provides a valuable complement to its existing life insurance business. The company also rolled out a slew of new products, including health insurance and travel insurance.

The company's best-in-class business performance is expected to continue into the new year. The company is expected to generate a robust return on equity in the next few years, aided by the company's strong underwriting discipline and cost-cutting measures. The company is also expected to withstand external headwinds, most notably a challenging macroeconomic environment.

Short-term and long-term credit ratings

Whether you're an investor, consumer or financial professional, AM Best's ratings provide a quantified assessment of the financial health and claims-paying capability of insurance companies. The rating agency rates debt instruments and insurance companies worldwide. Its website publishes ratings and other related information.

The ratings for the Zurich Insurance Group reflect its strong balance sheet strength, its financial flexibility and its ability to weather external headwinds, particularly from uncertain macroeconomic conditions. Zurich's strong geographic diversification, excellent liquidity and risk-adjusted capitalisation provide the foundation for its balance sheet strength.

AM Best assesses Zurich as very strong. The company maintains a very strong profile and excellent competitive position in the United States and Europe. It is also taking steps to address inflationary pressures. This includes selling parts of its life insurance back books. In addition, Zurich has enhanced its reserving practices in recent years.

AM Best expects Zurich's balance sheet sensitivity to market risk to decrease substantially following the sale of its back books. AM Best expects this to result in an improved return on equity for the insurer, as well as the reduction of its soft capital reliance.

The company's ratings also reflect a very strong capitalization profile and its strategic value to the parent company. Zurich's balance sheet strength is supported by relatively flat premium trends and high use of reinsurance through highly rated entities.

The company's financial strength rating also reflects the company's strong balance sheet, good financial flexibility, and appropriate enterprise risk management. AM Best expects Zurich to produce stable operating returns from its profit centres.

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