Financial highlights

The following table presents the summarized consolidated results of the Group for the years ended December 31, 2012 and 2011, and the financial position as of December 31, 2012 and 2011, respectively. All amounts are shown in USD millions and rounded to the nearest million unless otherwise stated with the consequence that the rounded amounts may not add to the rounded total in all cases. All ratios and variances are calculated using the underlying amounts rather than the rounded amounts. This document should be read in conjunction with the Annual Report 2012 for the Zurich Insurance Group and with its Consolidated financial statements as of December 31, 2012. Certain comparatives have been restated as set out in note 1 of the Consolidated financial statements.

In addition to the figures stated in accordance with International Financial Reporting Standards (IFRS), Zurich Insurance Group uses business operating profit (BOP) measures and other performance indicators to enhance the understanding of its results. These additional measures should be viewed as complementary to, and not as substitute to the IFRS figures. For a reconciliation of BOP to net income attributable to shareholders see note 29 of the Consolidated financial statements.

in USD millions, for the years ended December 31, unless otherwise stated 2012 20111 Change2
Business operating profit 4,075 4,243 (4%)
Net income attributable to shareholders 3,878 3,750 3%
       
General Insurance gross written premiums and policy fees 35,610 34,572 3%
Global Life gross written premiums, policy fees and insurance deposits 30,259 27,711 9%
Farmers Management Services management fees and other related revenues 2,846 2,767 3%
Farmers Re gross written premiums and policy fees 4,361 3,529 24%
       
General Insurance business operating profit 2,097 2,247 (7%)
General Insurance combined ratio 98.4% 98.9% 0.5 pts
       
Global Life business operating profit 1,338 1,353 (1%)
Global Life new business annual premium equivalent (APE) 4,0303 3,992 1%
Global Life new business margin, after tax (as % of APE) 22.1%3 24.5% (2.5 pts)
Global Life new business value, after tax 890 33 980 (9%)
       
Farmers business operating profit 1,414 1,486 (5%)
Farmers Management Services gross management result 1,378 1,333 3%
Farmers Management Services managed gross earned premium margin 7.3%4 7.3% -
       
Average Group investments 203,192 196,788 3%
Net investment result on Group investments 8,911 9,367 (5%)
Net investment return on Group investments5 4.4% 4.8% (0.4 pts)
Total return on Group investments5 7.0% 5.3% 1.7 pts
       
Shareholders’ equity 34,494 31,484 10%
Swiss Solvency Test capitalization ratio6 178% 183% (5 pts)
       
Diluted earnings per share (in CHF) 24.66 22.52 10%
Book value per share (in CHF) 214.79 202.17 6%
       
Return on common shareholders’ equity (ROE) 11.8% 11.9% (0.2 pts)
Business operating profit (after tax) return on common shareholders’ equity
(BOPAT ROE)		 9.3% 10.2% (0.9 pts)
       

1 December 31, 2011 has been restated as set out in note 1 of the Consolidated financial statements.

2 Parentheses around numbers represent an adverse variance

3 Does not include any contribution from Zurich Santander or from the acquisition of Zurich Insurance Malaysia Berhad (ZIMB).

4 Calculated based on gross earned premiums of the Farmers Exchanges of USD 18.8 billion, which excludes the return of USD 74 million in premiums as a result of the anticipated settlement of a lawsuit with the State of Texas.

5 Calculated on average Group investments.

6 Ratios as of July 1, 2012 and January 1, 2012, respectively, are calculated based on the Group’s internal model which is subject to the review and approval of the Group’s regulator, the Swiss Financial Market Supervisory Authority (FINMA). The SST Ratio for January 1, 2012 has been restated following FINMA’s review of the Annual SST Report.