Zurich Financial Services AG, Switzerland's largest insurer, reported a blowout fourth quarter and 2006 results Thursday, citing strong growth in several categories, especially in its largest market, the United States.
The company said fourth-quarter profits rose 33 percent as fewer claims from catastrophes helped propel earnings at its property and casualty unit, and that net income for the full year rose 41 percent to a record $4.5 billion.
As a result, the company said its board had recommended a 57 percent increase in its annual dividend, which is paid in Swiss francs, and a repurchase of approximately $1 billion in U.S. dollars in its stock during the year.
Besides strong results in the property-casualty segment, both globally and in the U.S., Zurich officials also cited "robust growth" in global sales of life insurance and a "solid expansion" of earnings at Farmers Management Services. Farmers Management Services provides the supports for Farmers Exchanges, which sells personal lines, primarily property-casualty lines businesses, throughout the U.S.
Zurich also said it will "look carefully" at targeted acquisitions where such opportunities arise and provided they can create shareholder value. "We believe the benefits from all these actions will drive strong performance throughout the market cycle," the company said.
For the quarter, net income climbed to $1.27 billion from $958 million a year earlier, the Zurich-based company said.
That beat analysts' $1.03 billion median profit estimate.
In its property-casualty business, growth in all major markets allowed operating profit to double to $3.8 billion for the year, Zurich officials said.
Zurich said it intends to increase profit by $2 billion over the next three years by improving underwriting and claims management, especially in the U.S.
Zurich also said it will merge its North American support services for Zurich's Farmers Group Inc. with its other North American operations to save $300 million over the next three years.
James J. Schiro, Zurich's chief executive officer, said the firm was "delighted" with the performance.
"The results highlight our ability to generate strong underlying earnings growth across our well-balanced and diversified book of business while maintaining financial strength and operational discipline," Mr. Schiro noted.
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