Zurich profit down in first half after severe weather events

Zurich Insurance reported a business operating profit of $2.3 billion for the first half of the year, down 9% over 2012.

For the second quarter (ended June 30), the company’s operating profit was $937 million, down 18% over the prior year’s comparable period.

Net income after tax attributable to shareholders for the first half was $1.85 billion, down from $2.2 billion in the first half of 2012.

The insurer also reported a combined ratio of 95.6%, an increase of 0.7 pts compared with prior year’s first half and a Q2 combined ratio of 96.2%, an increase of 1.1 pts compared with 2012.

For General Insurance, the company reported a business operating profit of $1.37 billion for the first half, down from $1.64 billion last year. Gross written premiums and policy fees increased by $617 million to $19.8 billion in the first half.

“We delivered these results in a period characterized by natural catastrophes and large weather-related events, including severe flooding in Eastern and Central Europe, tornadoes in Oklahoma as well an unusual number of mid-sized, weather-related events in the U.S., Canada and Europe,” noted Zurich’s CEO Martin Senn.

“The economic environment remains challenging with continued low interest rates exerting pressure on our investment income,” he added.

“Against this backdrop, we continue to see the benefits of our strategy. Our diversification into higher growth markets is delivering earnings while our sustained focus on pricing and portfolio discipline is generating benefits in mature markets.”

“Global Life and General Insurance continued to progress in target markets, while Farmers Re showed an improved underwriting performance, and our capital and solvency remain excellent,” he added.