Zurich Insurance: More Growth Ahead, Buy Confirmed

2025-05-09 10:48:49 ET

Summary

• Q1 results showed solid P&C premiums, strong Life business growth, and a higher-than-expected Solvency II ratio of 256%.
• We forecast a CHF 1 billion share buyback, driven by strong solvency and operating cash flow, complementing a 4.7% dividend yield.
• With projected EPS growth of 9% and a high RoE, we raised our target price and confirmed our buy rating.

Last time, we still believed there was room for stock price growth, and since then, the stock has indeed appreciated, validating our conviction. In the meantime, Zurich Insurance Group ( OTCQX:ZURVY , OTCQX:ZFSVF ) paid a generous dividend (in CHF), and we are up by 17.18% on a total return basis (Fig. 1), with a supportive performance vs. a negative S&P 500 change. In Fiscal Year 2024, the Swiss insurance group posted record earnings, setting the pace for the new 2025 plan. The company was already A Buy Ahead Of The Capital Market Day . However, we still believe in 1) a supportive pricing dynamic for the industry, 2) lower-than-expected natural catastrophe losses, and 3) downside protection thanks to a tasty dividend, a potential new buyback, and a safe Solvency Ratio. ...

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