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Zurich UK sees earnings rise after workplace sale

Zurich UK sees earnings rise after workplace sale

Zurich UK reported increased earnings in the six months after selling its workplace pension business to Scottish Widows.

In its half year results, the insurance company reported earnings of £142.5m, up by 14 per cent on a like for like basis from £125.4m the year before.

Zurich’s life sector reported profit of £66.6m, an increase of 3 per cent compared with the first half of 2017, and an annualised premium equivalent of £292.8m up by 31 per cent at the same point last year. 

Meanwhile the general insurance business saw profits increase by 24 per cent to £75.9m, despite unexpected claims for natural disasters and severe winter weather at the beginning of the year.

Last year Zurich sold its workplace pensions and savings business to Lloyds Banking Group, along with assets under administration of more than £15bn and 500,000 customers.

Tulsi Naidu, chief executive of Zurich UK, said the insurer delivered strong first half figures in the UK as the company continued to simplify, strengthen capability and create a strong customer and market focus. 

She said: "In the first half of the year, we saw a number of large and catastrophic claims from global natural disasters and severe UK winter weather.

"However, the impact of this has been offset by the strength of our underwriting discipline, and an emphasis on shifting the mix of our business by growing in the UK mid-market and SME segments."

Zurich’s combined ratio, which measures an insurance company’s revenue earnings from collected premiums relative to claims paid out, improved from 99.2 per cent in 2017 to 95.5 per cent this year. 

Ms Naidu said despite volatile financial markets and a highly competitive environment, Zurich UK’s life top line has grown by more than 30 per cent year on year. 

She added: "This includes the one-off effect of our largest ever intermediated longevity swap – a £2bn deal with National Grid - and is underpinned by individual protection and retail platform flows."

rachel.addison@ft.com