Combined ratio improves 2.7 points to 97%

Zurich’s UK general insurance business made an operating profit of $256m (£163m) in 2011, up 28% on the $200m it made in 2010.

The combined ratio improved 2.7 percentage points to 97% (2010: 99.7%). A big driver of the combined ratio improvement was a 3.9 percentage-point drop  in the loss ratio to 69.2%.

The UK general insurance net underwriting result improved sharply to $79m in 2011 from just $9m in 2010.

The improvements follow Zurich’s efforts to re-price business in the UK, particularly motor. The company’s more selective underwriting can be seen in the 1.6% reduction in gross written premiums and policy fees to $2.76bn (2010: $2.80bn).

Despite the improvements in the UK, Zurich’s group-wide general insurance result deteriorated in 2011. The general insurance operating profit dropped 15% to $2.3bn (2010: $2.7bn), while the combined ratio increased  0.9 points to 98.8% (2010: 97.9%).

Zurich attributed the drop to the large number of global weather-related catastrophes in 2011, which resulted in a $1bn claims bill for the insurer.

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