Research Update: Zurich Insurance Co. Ltd. 'AA' Ratings Affirmed Following Revised Capital Model Criteria; Outlook Remains Stable

On Nov. 15, 2023, we published our revised criteria for analyzing insurers' risk-based capital (see "Insurer Risk-Based Capital Adequacy--Methodology And Assumptions"). Under the revised criteria, we consider Switzerland-based Zurich Insurance Co. Ltd.'s (ZIC's) capital and earnings to remain very strong. We therefore affirmed our 'AA/A-1+' long- and short-term issuer credit ratings and 'AA' financial strength rating on ZIC and its related core entities. The stable outlook reflects our view that, over the next two years, ZIC's globally diversified business profile will allow it to source strong and stable earnings and remain among the leading performers in its peer group of global multiline insurers (GMIs). On Feb. 28, 2024, S&P Global Ratings affirmed its 'AA' long-term and 'A-1+' short-term issuer credit

...Key strengths Key risks Globally diversified multiline insurer, with a well-established brand and top positions in developed markets in Western Europe and the U.S. Potential volatility due to higher-than-average exposure to U.S. long-tail business lines. Stringent implementation of group strategy with a track record of strong and stable profitability, supported by significant and stable fee income from Farmers Management Services (Farmers), as well as its comprehensive risk management practices. Persistent industry wide cyclical pricing pressure and inflation adds uncertainty to results. Very strong capital and earnings, according to S&P Global Ratings' risk-based capital model....

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