Zurich In­sur­ance re­ports US$2.1 bil. in H1 prof­its

The China Post - - WORLD BUSINESS -

Zurich In­sur­ance re­ported Thurs­day first half net prof­its of US$2.1 bil­lion (1.9 bil­lion eu­ros), down 3 per­cent over the same pe­riod last year, fol­low­ing large losses in its gen­eral in­sur­ance busi­ness.

The re­port came a week af­ter Zurich re­vealed its in­ter­est in buy­ing Bri­tish ri­val, Royal & Sun Al­liance, news which sent RSA shares surg­ing.

Zurich’s busi­ness op­er­at­ing prof­its of US$2.2 bil­lion marked a 15 per­cent fall com­pared to the first half of 2014.

That fig­ure was well be­low the ex­pec­ta­tions of an­a­lysts polled by the AWP fi­nan­cial news agency who had an­tic­i­pated an op­er­at­ing profit of US$2.5 bil­lion.

The firm’s shares were trad­ing down 3.82 per­cent on Thurs­day at 287 Swiss francs a piece, as the Swiss stock ex­change’s main SMI in­dex was down 0.2 per­cent.

“In terms of our key tar­gets, we re­main in a very strong po­si­tion,” Chief Ex­ec­u­tive Martin Senn said in a state­ment.

He noted the strong per­for­mance in the firm’s Global Life and Farm­ers di­vi­sions, while not­ing that the Gen­eral In­sur­ance unit “was ad­versely af­fected by large losses.”

Busi­ness op­er­at­ing prof­its in Gen­eral In­sur­ance, the largest unit at Zurich, fell by 31 per­cent com­pared to the first half of last year to US$1.2 bil­lion.

Sig­nif­i­cant losses in Bri­tain and among the cor­po­rate di­vi­sion in North Amer­ica were largely re­spon­si­ble for the prof­its fall, as were higher ex­penses and “high lev­els of catas­tro­phe and weather re­lated losses,” the com­pany said.

The Swiss in­sur­ance gi­ant’s July 28 con­fir­ma­tion that it was eval­u­at­ing a pos­si­ble of­fer for RSA earned praise from some an­a­lysts, who said such a takeover would of­fer Zurich a stronger foothold in north- ern Europe and Latin Amer­ica.

Senn on Thurs­day said an RSA takeover “could bring sig­nif­i­cant ben­e­fits to us and to our in­vestors in terms of the com­ple­men­tary fit.”

Zurich In­sur­ance in­di­cated to in­vestors in May that it had a cap­i­tal sur­plus of some US$3.0 bil­lion that it planned to de­ploy, but on Thurs­day raised that tar­get to US$3.5 bil­lion.

Media re­ports in Bri­tain last week said Zurich had val­ued RSA at US$8.7 bil­lion.

“Any cap­i­tal de­ploy­ment would need to meet the same hur­dles that we ap­ply to any other in­vest­ment,” Senn said.

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