NU Online News Service, May 19, 6:08 p.m. EDT–Zurich Financial Services posted a 21 percent rise in total first quarter income, thanks to contributions from its financing unit and run-off businesses.
The Zurich, Switzerland-based insurance giant reported $779 million profit for its 2005 first quarter, up from $644 million one year ago.
Management said the financial picture was helped by improvements in its "Other Businesses" segment, which includes its alternative financing unit, Centre, and run-off businesses. The Other Businesses segment reported $124 million profit, up from a loss of $54 million a year ago.
However, Zurich's property-casualty insurance business reported lukewarm results. Its p-c operating profit was $609 million, down 1 percent from $618 million. Its combined ratio deteriorated 0.3 points to 96.9, from 96.6. Zurich said its p-c operating profit declined in global corporate/international divisions, while income from North America commercial and European general insurance improved.
Zurich's p-c gross written premiums and policy fees rose 2.3 percent to $10.2 billion, while net earned premiums went up 5.4 percent to $6.8 billion, which the company attributed to the "flow-through of higher priced business written in prior periods and less business ceded to reinsurers."
Zurich Chief Executive James Schiro said the company is "off to a good start in increasingly competitive markets that held revenue growth essentially flat." He added that Zurich remains committed to disciplined underwriting.
In a cautious commentary about market conditions, Mr. Schiro said the challenging environment is characterized by "declining rates in some general insurance markets, continued low investment returns, ongoing claims inflation, and heightened regulatory scrutiny in a litigious climate."
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