Insurer Zurich's first half profit hit by weather disasters

5th August 2010, Comments 0 comments

Swiss insurer Zurich Financial Services said on Thursday its first-half net profits fell 16 percent to 1.6 billion dollars, impacted by freak weather events and natural disasters.

"In general insurance, the solid performance was impacted by a high occurrence of catastrophe and weather-driven events during the first half of the year," said the insurer in its earnings statement.

February's earthquake in Chile cost the insurer about 200 million dollars, while the Gulf of Mexico oil spill came at a cost of 20 million dollars excluding indirect expenses, said Dieter Wemmer, chief financial officer.

The group's general insurance unit therefore posted a drop of a fifth in its business operating profit to 1.4 billion dollars, although its global life division and US subsidiary Farmers posted gains in operating profit.

Zurich's overall net profit figure was also impacted by 330 million dollars in provisions set aside by the insurer to meet potential losses arising from its commercial property loans in Britain and Ireland.

The insurer had announced the provisions in July, explaining that there was "continuing deterioration in the UK and Irish property markets."

Stocks in the insurer fell 2.76 percent in morning trade to 242.80 francs, underperforming a weak Swiss Market Index, which was down 0.07 percent.

© 2010 AFP

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