Zurich Insurance Group AG posted a 6% gain in profit for the first half of 2025 as the insurer shook off losses from the California wildfires at the start of the year.

Group operating profit rose to a record $4.22 billion the insurer said on Thursday, beating an analyst estimate of $4.16 billon. Net income increased 1% to $3.07 billion from the same period a year earlier.

Zurich Insurance’s key property and casualty unit rose by 9% on a like-for-like basis from the same period a year earlier, with $2.4 billion in operating profit. It has a 92.4% combined ratio with better risk management meaning natural catastrophe losses totaled 1.8% of that, down from 2.4% in the first half of 2024.

The US-focused Farmers arm saw $1.15 billion in operating profit, slightly ahead of estimates. A strong underwriting result saw it absorb earlier losses from the Los Angeles wildfires with the unit helped by a supportive rate environment and improved retention in the second quarter.

The insurer had previously reported natural catastrophe losses of $200 million for the first three months of the year, mainly from its exposure to the January California wildfires. The wildfire losses come from Zurich’s Farmers division as well its exposure to California through its commercial business.

Despite the strong headline numbers, analysts viewed the results as a mixed bag with a slowdown in pricing one area of concern. Morgan Stanley said in a note that the results contain “something for both the bulls and the bears.”

Chief Executive Officer Mario Greco said on Bloomberg TV that while property pricing momentum had cooled, other lines of business, such as motor and liability, were continuing to see pretty high price increases.

He said that overall margins “are healthy and we are very much expanding in mid-market customers, in small and medium enterprises and in the specialty area.”

Shares were up 1.9% at 11:32 a.m. in Zurich.

Bolt On

Greco, who’s been the insurer’s boss since 2016, has simplified Zurich’s structure and expanded the business through bolt-on acquisitions across the globe.

In July the firm said it had agreed to buy BOXX Insurance Inc, a Canadian cyber risk management firm, marking the Swiss insurer’s latest push into the insurance technology sector

Still, Zurich’s shares have underperformed their European peers, with some analysts believing this is due to the company’s US exposure.

The insurer is also being impacted by the strengthened Swiss franc and weakening dollar. Although the company reports in dollars and generates most of its revenue in currencies other than the Swiss franc, it is the currency the company’s shares trade in, meaning the relative value of the firm has declined. The company also pays out its dividend in Swiss francs making it more costly for the company to do so.

“The Swiss franc strength is a drag on our results, but as you can see from today, it is a drag that we can absorb,” Greco said.

Top photo: A Zurich Insurance Group building in Zurich, Switzerland. Photographer: Alessandro Della Bella/Bloomberg.

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