Zurich Insurance posts drop in 2014 profit

Swiss group Zurich Insurance on said Thursday its net profit dropped 3 percent last year due to the sale of a Russian business and a tough economic environment.

The top Swiss insurer said in a statement its net income dropped to $3.9 billion (3.4 billion euros) in 2014 while turnover increased by six percent to $74.43 billion.

Operating profit meanwhile declined one percent from the preceding year to $4.64 billion.

Chief Executive Officer Martin Senn said the results were “below expectations,” saying the insurance industry was buffeted by “external headwinds” and a tough macroeconomic environment.

Zurich Insurance spokeswoman Sylvia Gaumann also blamed the lower profit on a $247 million loss in the fourth quarter over the sale of a Russian retail business.

The bank had announced it would suffer such a loss back in October, although it anticipated a higher figure of around $300 million.

The Swiss stock market immediately punished the firm as the share value dropped by 4.7 percent from the opening.

It closed the day down 3.10 percent even as the main SMI index was up 0.39 percent.

In the fourth quarter of last year, the firm’s net profit dropped by 20 percent to 858 million dollars, while its turnover increased 13 percent to $19.7 billion.

The insurer’s board of directors proposed for 2014 a dividend of 17 Swiss francs per share, which is unchanged from the previous year.