Profit up for Zurich, but likely won’t meet three-year general insurance target

Zurich Insurance Group has reported a business operating profit of $3.57 billion, with net income attributable to shareholders of just under $3 billion for the first nine months of the year, but said it will not achieve its three-year target for its general insurance business.

For the third quarter (ended Sept. 30), the insurer reported a business operating profit of $1.28 billion, up from $998 million for the comparable quarter of 2012. All figures are in U.S. dollars.

Net income attributable to shareholders for the quarter was $1.1 billion, up from $672 million in Q3 of 2012.

“We delivered a solid operating profit in all core segments for the first nine months of 2013,” CEO Martin Senn commented in a statement on the results.

“Against the backdrop of a fragile global economic recovery and persisting low interest rates, we remained focused on our strategy, growing our business in emerging markets while delivering a resilient performance in mature markets.”

Zurich’s general insurance business showed slight improvement, with a business operating profit of $2.12 billion for the first three quarters of the year, up from $2.085 billion for the first nine months of 2012.

Gross written premiums and policy fees increased by $873 million to $28.2 billion, and the combined ratio for that part of the business also improved slightly to 95.3%, from 96.3% last year.

“This was partly offset by the continued reduction in investment income and losses from severe weather-related events and other large losses,” Zurich noted. “These included losses related to floods and hail in Europe, and tornadoes and floods in North America.”

Zurich’s Farmers business in the U.S. produced a business operating profit of $1.1 billion, a $117 million increase, mainly because of an improved underwriting result for Farmers Re.

However, for general insurance and for Farmers, Zurich said that challenges remain and it is not on track to meet its three-year target (set in 2010).