Results achieved despite “adverse circumstances”
Zurich Financial Services Group today reported nine month operating profit of $4.2bn (£2.8bn), down 15% and net income down 32% to $2.8bn (£1.9bn).
It said: “These results were achieved despite the impact of particularly adverse circumstances during the third quarter, including net capital losses for shareholders of $1.1bn and catastrophe losses attributable to hurricanes Gustav and Ike in the US of $595m.”
The company reported general insurance gross written premiums and policy fees of $29.2bn, up 7% or 1% in local currencies. Profit in general insurance fell 7% from $2,779m to $2,578m. The combined ratio of 98.7%, with hurricanes Gustav and Ike accounting for 2.4 points, was worse by 1.9pts on the 96.9% last year.
“In the face of such turbulent times, I am particularly pleased in our ability to deliver continued profits and maintain our high solvency ratio,” said chief executive James Schiro. “These results illustrate the value of our disciplined approach to risk, the strength of our balance sheet and the resilience of our global book of businesses. Looking forward, we see an improving general insurance environment and continued opportunities across all our businesses, leaving us confident in our ability to generate consistent shareholder value.”
The company said: “In Europe General Insurance, a combination of enhanced product propositions, effective distribution initiatives, improved renewal rates and tactical acquisitions generated profitable growth of 6% in local currencies. At North America Commercial, the continued application of enhanced segmentation techniques, underwriting discipline and proactive targeting of profitable lines of business mitigated a significant portion of the effects of a challenging rate environment, but the Group still reduced premium volumes where margins were not attractive while the effects of the recent hurricanes drove down profitability. Reflecting Zurich's disciplined underwriting approach, Global Corporate's gross written premiums dropped 2% in local currencies, while the impact of the US catastrophes and other large losses lowered profitability. International Businesses continued to experience solid growth and increased profitability across all its regions, resulting in a 10% increase in gross written premiums in local currencies and a nearly 40% increase in profitability.”