GI division review ’on track… actions already being implemented’

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Zurich said its global general insurance business saw combined operating ratio decline to 101.9% in the nine months to September from 96.0% a year earlier.

The Swiss insurer reported group GI business operating profit of $983m (£638m), including a loss of $183m for the third quarter.

It said the result was due to a $275m loss related to the Tianjin explosions in China and other large issues, as well as adverse claims experience and what it described as ”negative prior year development in certain portfolios”.

UK GI business operating profit slumped to $142m for the nine months from $298m a year earlier.

UK gross written premium and policy fees were $1.9bn, down from $2.1bn, and the UK net underwriting result was $43m, compared with $200m a year earlier

The company said its review of its business is on track, with actions already being implemented to address underlying performance issues.

Zurich announced a fundamental review of its GI business in September when it withdrew from its proposed £5.6bn offer for RSA, saying it had to correct its own problems before embarking on a takeover.

“The review of the business is on track, with actions already being implemented to address underlying performance issues,” Zurich said.

”The business is exploring options to reduce earnings volatility through the use of reinsurance and other measures, and is re-underwriting, re-pricing or exiting a number of underperforming portfolios. Additional cost savings are being implemented, while further measures are being taken to sharpen the business focus and streamline governance and organization,” it said.

Overall group business operating profit was $2.5bn for the nine months ended September, down from $3.8bn a year earlier.

“These results are in line with the preliminary update that we released in September in response to the underperformance in parts of our General Insurance business,” said chief executive Martin Senn.

“A comprehensive review of the business has led to an action plan to improve performance, reduce volatility and deliver a rapid recovery in profitability. This includes the reshaping of the management team, re-underwriting and exit of underperforming portfolios and additional measures to improve efficiency.”