Investments Drive Zurich Net Down 75%

NU Online News Service, May 7, 3:46 p.m. EDT

Zurich Financial Services reported a 2009 first quarter net income of $362 million, a 75 percent drop from the 2008 first quarter figure of $1.4 billion.

The Swiss insurer suffered more than $1 billion in net capital losses on investments, and the company also saw its general insurance gross written premiums fall by 12 percent, compared to the previous year's first quarter.

Still, Chief Executive Officer James J. Schiro said in a statement, "We have shown continual quarter-on-quarter improvement since the financial crisis began, and remain confident in our strategy despite the ongoing financial turmoil."

This quarter also represents Zurich's 25th consecutive profitable quarter, the company noted. Zurich reported 2009 first quarter gross written premiums of $9.8 billion, down from 2008 first quarter gross written premiums of $11.2 billion.

The 2009 first quarter general insurance combined ratio was 95.8, up 1.2 points from the 2008 first quarter combined ratio of 94.6.

In a conference call, Mr. Schiro said the general insurance premium drop reflects the company's "disciplined approach to underwriting."

He added, "The real story there is the sustained improvement in rates we are seeing across even the most competitive general insurance markets."

For its investments, Zurich reported just over $1 billion in net capital losses, down from a gain of $10 million in last year's first quarter.

Dieter Wemmer, Zurich CFO, said on the conference call, "We continue to be very comfortable with the quality of our investments and our asset allocation."

Speaking to the results overall, Mr. Shiro said in a statement, "Our ability to deliver against a clear and consistent strategy, and to do so with discipline and increasing confidence, is why this period of disruption continues to be an opportunity for Zurich."