AM Best Reaffirms Credit Ratings of Zurich Insurance Group and Key Rated Subsidiaries
AM Best has reaffirmed the strong financial strength and credit ratings of Zurich Insurance Group Ltd. (Zurich), reinforcing the global insurer’s position as a financially resilient organization with a diversified business model, strong operating performance and robust enterprise risk management capabilities.
The ratings agency has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” (Superior) for the principal rated insurance subsidiaries of Zurich Insurance Group Ltd., which is headquartered in Switzerland. AM Best has also affirmed the Long-Term ICR of “a+” (Excellent) for Zurich Insurance Group Ltd., which operates as a non-operating holding company.
The outlook for all of these Credit Ratings remains stable, indicating that AM Best currently expects Zurich’s financial strength and credit profile to remain resilient over the near to medium term.
AM Best’s rating assessment reflects several key characteristics of Zurich’s overall profile. These include its very strong balance sheet strength, strong operating performance, very favorable business profile and very strong enterprise risk management. Together, these factors provide the foundation for the insurer’s high-quality credit ratings and support its ability to navigate changing insurance and financial market conditions.
Strong Balance Sheet Supports Zurich’s Ratings
A central factor behind AM Best’s assessment is Zurich’s balance sheet strength. The rating agency evaluates the company’s risk-adjusted capitalization, measured using its Best’s Capital Adequacy Ratio (BCAR), at the strongest level.
Strong capitalization provides an important buffer for an international insurance group with significant exposure across multiple insurance lines and geographic markets. It also gives Zurich greater flexibility to absorb unexpected losses, manage market volatility and pursue strategic growth opportunities.
Zurich is expected to maintain a robust level of risk-adjusted capitalization even as it undertakes a major strategic acquisition.
During the second half of 2026, Zurich is expected to complete its acquisition of Beazley plc, a transaction valued at approximately USD 11 billion. The acquisition represents a significant investment for Zurich and is expected to strengthen the group’s position in the global commercial and specialty insurance markets.
Despite the size of the transaction, AM Best expects Zurich’s risk-adjusted capitalization to remain at a robust level following completion of the acquisition.
One factor supporting this expectation is the approximately USD 5 billion of capital raised by Zurich to partially fund the transaction. The additional capital, combined with Zurich’s strong ability to generate capital organically through its ongoing operations, is expected to help preserve the group’s financial flexibility following the acquisition.
AM Best’s assessment also incorporates the contribution of net economic value associated with Zurich’s long-term business. In addition, the rating agency gives credit for hybrid debt within its assessment of the group’s capital structure.
However, AM Best considers these components to be relatively weaker elements of Zurich’s overall capital structure compared with its core capital resources. Despite these considerations, the group’s overall risk-adjusted capitalization remains a significant strength.
Excellent Financial Flexibility
Zurich also benefits from strong financial flexibility, which is supported by its established access to international capital markets.
The insurer is a regular participant in the capital markets and has demonstrated a successful track record of issuing debt instruments. This access provides Zurich with additional options for managing its capital position, funding strategic initiatives and addressing financial requirements as they arise.
According to AM Best’s assessment, Zurich’s consolidated adjusted financial leverage at year-end 2025 was 19.6%, with no credit given for the contractual service margin.
The group also maintained strong interest coverage at year-end 2025, providing additional evidence of its ability to service its financial obligations.
Financial leverage and interest coverage are important components of an insurer’s overall credit profile, particularly for a global organization pursuing significant strategic investments. Zurich’s relatively strong metrics provide additional support for AM Best’s assessment of its financial strength and financial flexibility.
Strong and Diversified Operating Performance
Zurich’s operating performance is another major contributor to its favorable ratings.
The group benefits from a highly diversified earnings profile across different lines of business and geographic markets. This diversification reduces the company’s dependence on any single insurance segment or market and provides multiple sources of earnings.
Zurich reported a net combined ratio of 92.6% for 2025, as calculated by the group. A combined ratio below 100% generally indicates that an insurer is generating an underwriting profit before taking investment income into account. Zurich’s reported ratio therefore demonstrates strong underwriting performance during the year.
The group’s results have also been supported by growth in its protection and savings businesses.
In particular, Zurich recorded 15% growth in life present value of new business premiums during 2025. The increase highlights continued demand for its life insurance and savings-related products and provides an additional source of growth within the group’s broader earnings profile.
The combination of strong underwriting performance, growth in life insurance and savings products and geographically diversified earnings supports the stability of Zurich’s overall operating results.
Recurring Fee-Based Income Adds Stability
Another important component of Zurich’s earnings profile is the recurring fee-based income it receives from providing non-claims management services to Farmers Exchanges, a leading insurance group operating in the United States.
Zurich generated approximately USD 2.0 billion in 2025 from these services.
The fee-based nature of this income provides Zurich with a source of earnings that is distinct from traditional insurance underwriting results. This diversification can help enhance the stability and predictability of the group’s overall earnings.
The Farmers-related business is therefore an important element of Zurich’s financial profile and contributes to the group’s ability to generate earnings from multiple sources.
Broad Global Insurance Presence
Zurich is one of the world’s largest insurance groups, with a comprehensive product portfolio spanning both life and non-life insurance.
The company has developed significant competitive positions across major global insurance markets. Its strongest market positions include Europe and the United States, while the group also maintains a substantial presence in Latin America and selective operations across the Asia-Pacific region.
This geographic diversification provides Zurich with exposure to a broad range of economies, customers and insurance markets.
A diversified geographic footprint can also help reduce the impact of adverse developments in any individual market. At the same time, Zurich’s scale allows the group to leverage its expertise, technology, capital resources and risk-management capabilities across multiple regions.
Beazley Acquisition Strengthens Specialty Insurance Profile
Zurich’s planned acquisition of Beazley is expected to further enhance its global business profile.
Beazley is recognized for its presence in commercial and specialty insurance, areas that offer opportunities for insurers with specialized underwriting expertise and strong risk-management capabilities.
The anticipated acquisition is therefore strategically significant for Zurich because it is expected to strengthen the group’s position in the global commercial and specialty insurance market.
AM Best’s assessment takes the pending transaction into consideration while also recognizing the capital measures Zurich has undertaken to support the acquisition.
The combination of Zurich’s existing global platform and Beazley’s specialty insurance capabilities could provide opportunities for further diversification and expansion across commercial insurance markets.
At the same time, the size of the transaction makes capital management and integration important considerations as Zurich moves toward completion. AM Best’s expectation that Zurich will maintain robust risk-adjusted capitalization provides support for the transaction from a credit-rating perspective.
Enterprise Risk Management Remains a Key Strength
Zurich’s very strong enterprise risk management is another important factor supporting the affirmed ratings.
For a global insurance group operating across multiple business lines and geographic markets, effective risk management is critical. Insurers must manage underwriting risks, investment risks, catastrophe exposures, market volatility, credit risks and operational challenges while maintaining sufficient capital.
Zurich’s enterprise risk management framework is viewed favorably by AM Best and supports the group’s ability to identify, assess and manage these risks.
Strong risk management will also remain important as Zurich expands its commercial and specialty insurance capabilities through the planned Beazley acquisition.
Ratings Affirmed for Zurich’s Insurance Subsidiaries
AM Best has affirmed the A+ (Superior) Financial Strength Rating and “aa” (Superior) Long-Term Issuer Credit Ratings, with stable outlooks, for the following Zurich subsidiaries:
- The Fidelity and Deposit Company of Maryland
- Empire Fire and Marine Insurance Company
- Empire Indemnity Insurance Company
- Universal Underwriters Insurance Company
- American Guarantee and Liability Insurance Company
- Zurich American Insurance Company
- Rural Community Insurance Company
- American Zurich Insurance Company
- Universal Underwriters of Texas Insurance Company
- Steadfast Insurance Company
- Zurich American Insurance Company of Illinois
- Colonial American Casualty & Surety Company
- Zurich Insurance Company Limited
- Zurich American Life Insurance Company
The affirmation across these entities demonstrates the strength and consistency of Zurich’s broader insurance organization.
The ratings recognize the financial support and operating strength associated with the group while reflecting the individual subsidiaries’ roles within Zurich’s global insurance platform.
The stable outlook assigned to Zurich’s ratings indicates that AM Best currently does not anticipate a material deterioration in the group’s financial strength or credit profile.
The outlook is supported by Zurich’s strongest-level risk-adjusted capitalization, diversified earnings profile, strong underwriting performance, access to capital markets and robust enterprise risk management.
The expected Beazley acquisition represents an important strategic development, but AM Best expects Zurich to retain robust capitalization following completion of the transaction.
Zurich’s ability to generate capital organically will also remain an important factor supporting its financial position.
Zurich Positioned for Continued Global Growth
The reaffirmation of Zurich’s ratings comes as the global insurance industry continues to navigate evolving economic conditions, changing customer needs, technological developments and increasingly complex risks.
Zurich’s diversified business model provides exposure to multiple sources of premium and earnings, while its strong presence in Europe, the United States and Latin America gives the group significant global scale.
The planned Beazley acquisition could further strengthen the company’s position in commercial and specialty insurance, adding another important dimension to its global franchise.
At the same time, Zurich’s strong capitalization and financial flexibility provide a foundation for continued investment and strategic growth.
AM Best’s decision to affirm the ratings reflects its view that Zurich possesses the financial resources, operating capabilities and risk-management framework necessary to maintain a strong credit profile.
With an A+ Superior Financial Strength Rating for its main rated insurance subsidiaries and a “aa” Superior Long-Term Issuer Credit Rating, Zurich continues to demonstrate substantial financial strength. The stable outlook further indicates confidence in the group’s ability to maintain this position while executing its strategic priorities.
As Zurich progresses with the planned Beazley acquisition and continues to build its global insurance operations, maintaining disciplined capital management, strong underwriting performance and effective enterprise risk management will remain central to sustaining its current ratings profile.
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