Zurich Financial Services has reported strong profits growth for the first half of the year of £1 billion and a turnaround in its UK general insurance business.

It has also announced plans to develop its internet services to customers and intermediaries in a partnership involving US computer companies IBM and ChannelPoint.

A spokesman said: "The aim is to create a virtual marketplace to enable our customers to buy our products over the internet by the middle of 2000."

The combined general and life insurance group saw net income increase by slightly more than 17%, compared to the same period last year.

Earnings growth was driven by improved performance in Zurich's general insurance business despite strong competition for business.

Gross general insurance income grew by almost six per cent for the group worldwide but declined in the UK.

However a stricter underwriting policy brought about an improvement in the profitability of Zurich's underwriting business.

General insurance business remains Zurich's core interest with almost 60% of premium income.

Reinsurance, representing nine per cent of premium business, increased by six per cent.

Zurich recorded a profit on its asset management of £75m and continues to make substantial investments, particularly in Europe and south America.

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