Zurich Earnings: Good Mid-Single-Digit Rise in Business Operating Profit; Shares Undervalued

Zurich Insurance has delivered a sturdy set of results for the first half of 2024. Net income after taxes is ahead of company-compiled consensus, at the top end of the range. At $3.03 billion it also looks to be ahead of our $5.24 billion estimate for the full year. These results have been driven by better performance in life and health insurance and the Farmers Management Services unit. As at the end of June, Zurich held 232% solvency, ahead of the 160% goal. The 12.5% return on equity the business has generated so far, is already above its cost of capital and looks to be ahead of the better-than-20% 2023-25 target. We maintain our CHF 495 per-share fair value estimate and narrow moat rating.