Sustained track record of very strong underlying operating performance. Strong enterprise risk management (ERM). Very strong competitive position. Capital adequacy as measured by our model, although strong, is a relative weakness to the ratings. The ratings on Zurich Insurance Co. and the core operating subsidiaries of Zurich Insurance Group (ZIG) reflects ZIG's very strong competitive position, very strong underlying performance, and strong enterprise risk management (ERM). These strengths are partly offset by our opinion that ZIG's capitalization, although improved, remains a relative rating weakness. The group's average underlying operating performance in 2007-2011 was very strong, despite unfavorable financial markets and operating conditions. The business operating profit (BOP) after-tax return on equity (ROE) reached 10.2% in 2011, after 12.9% in 2010,
