Zurich Insurance Company, the world's sixth largest insurance group, has posted “disappointing” results for 2000.

Gross written premiums in the UK fell from $2.8bn (£1.96bn) in 1999 to $2.7bn (£1.93bn) last year.

Net UK income fell from $216m (£151m) to $182m (£128m).

The company's overall results were worse than expected, with shares tumbling by 17% – the lowest performance in three years.

The insurer, which owns Eagle Star and Allied Dunbar, warned in February that one-off charges of some $500m (£351m) meant 2000 earnings would be less than 5% below the 1999 level.

Chairman and executive Rolf Huppi warned that 2001 would be another challenging year. “Management is determined to improve the performance of the group and we continue to expect that Zurich can achieve its long-term earnings growth target of 10% to 15%,” he said.

The group's non-life income was adversely affected by higher non-technical expenses, foreign exchange developments and costs associated with e-enabling the group's businesses.

As part of its long-term strategy, Zurich has decided to exit the assumed reinsurance business of Zurich Re.

It plans to accomplish this via a spin-off. Zurich Re, which will be renamed, will then become a fully independent, separately listed reinsurer.

The company says that it will also dispose of underperforming businesses, representing a market value of $4bn (£2.8bn).

Zurich's poor performance comes at a time when several European insurance companies are experiencing a downturn in share prices.

Share prices in France's Axa and Germany's Allianz were down 7% and 4% respectively.