Zurich Financial Posts $701 Million Profit

Zurich Financial Posts $701 Million Profit

NU Online News Service, Nov. 20, 3:01 p.m. EST?Switzerland-based insurer Zurich Financial Services said increased earnings and cost-cutting measures helped it post a $701 million third-quarter profit compared with a net loss of $763 million during the corresponding period last year.

The company said last year it was hurt by the declining value of costly investments made in the 1990s, write-down of certain asset values and a charge increase the company's non-life reserves.

For the full-year 2002, the company had reported special provisions of $3.5 billion to strengthen its balance sheet. It also took steps to refocus its activities and exit unprofitable business no longer considered core last year.

Zurich Financial for the full-year 2002 reported a $3.4 billion net loss.

The most recent results "demonstrate that Zurich has come a long way over the last year," said James Schiro, chief executive officer at the company. He also said Zurich had a significant improvement for its 2003 nine-month results, with net income of $1.4 billion. In contrast, the company had a net loss of $2.79 billion for the first three quarters of 2002.

Other positive figures included Zurich's business operating profit, which rose to $1.47 billion for the first nine months from $490 million for the same period one year ago.

The company also reported 26 percent premium growth in non-life insurance to $27.8 billion for the first three quarters of 2003, compared to the same period one year ago. Combined ratio for the first three quarters was at 98.2 percent, an improvement of 16.6 points over last year.

Mr. Schiro also noted that Zurich is benefiting from a number of factors, including improved claims and expense management in its core businesses, firm rates in most non-life markets, and the modest recovery in the global equity markets. "Having generated a net income of $1.4 billion in the first nine months, we are now able to deal with adverse developments from a position of operational and financial strength," he said.