Winterthur, the group that owns Churchill, made a net operating loss of CHF 637m in the first half of the year, it announced today.
The result, driven by falling investment returns, has prompted plans to put premiums up and cut costs.
The group saw premium growth of 9% in the first half of the year and improved its technical result and combined ratio but was let down by falling investment income.
Winterthur's parent group, Credit Suisse, has launched plans to strengthen the group's capital base.
Winterthur's investment income was down by CHF 1.5bn against the first half of last year as a result of selling shares from the general insurance operation's portfolio in a bear market.
In the second quarter of 2002, Winterthur wrote CHF 4.122bn of gross premiums, down from CHF4.339bn in the same period last year.
It made a net operating loss of CHF490m for the second quarter, excluding minority interests, compared to a profit of CHF 255m the time before.
The combined ratio, which measures claims and costs as a percentage of premiums, improved to 103.7% from 108.8% for the second quarter.
The claims ratio, excluding dividends to policyholders, fell to 74.7% from 78.6% last time and the expense ratio fell to 29% from 30.2%.
The group had assets under management of CHF 29.6bn on 30 June this year, down from CHF 30.5 on 31 December 2001.
Technical provisions increased over the same period to CHF 29.7bn from CHF 27.7bn.
Winterthur's parent group, Credit Suisse, reported a net operating loss from its financial services division of CHF 271m in the second quarter.
It explained the loss as the result of very low investment income from its insurance units.
Its assets under management fell by 5.7% in the second quarter, to CHF 713.3bn.
