Zurich Insurance lifts profit goal for life insurance, but Farmers miss hits shares

By Paolo Laudani

Aug 6 (Reuters) - Zurich Insurance on Thursday reported a half-year operating profit above market expectations and lifted its guidance for the life insurance unit, reflecting strong growth in the business.

Europe's second-largest insurer by market capitalisation said operating profit was $4.8 billion in the first six months of 2026, beating analysts' average estimate of $4.66 billion in a company-provided consensus.

However, the group's shares fell 2.6% in first hours of trading, with analysts at Vontobel and Oddo BHF flagging a lower-than-expected operating profit at its wholly-owned U.S.-based subsidiary Farmers.

The guidance hike for the life insurance business was the key positive of the report, analysts from RBC Capital Markets said in a note.

Zurich now expects the unit's operating profit to grow by at least 10% this year, having previously guided for mid-single-digit percentage growth.

As the largest European insurer so far to report quarterly results, Zurich's figures are scrutinized ahead of Allianz's and Generali's earnings, set to be published on Friday and later on Thursday, respectively.

Vontobel noted that Zurich is ahead of its 2027 financial targets, but market focus remains on the integration of Beazley, whose shareholders approved the Swiss group's £8.1 billion ($10.9 billion) all-cash takeover in April.

"The retention of Beazley's underwriters is key to a successful and accretive outcome, with completion confirmed to be in the second half of 2026," Vontobel analysts wrote in their note to investors.

A halved pre-tax profit at Beazley in the first half of the year, reported on Wednesday, could be another drag on Zurich's shares, they added.

Zurich posted an operating profit of $2.8 billion for its core property and casualty insurance business, which was also above a consensus of $2.73 billion.

($1 = 0.7431 pounds)

(Reporting by Paolo Laudani; editing by Milla Nissi-Prussak)