Posted on 06 May 2011
As a result of more than $500 million in costs stemming from recent catastrophes in Asia and weak European and U.S. economies, Zurich Financial Services AG's first-quarter net profit dropped 32%. Despite the hit, Zurich Financial was upbeat about its future performance, although it didn't provide a concrete forecast, saying only that it will "remain focused on its strategy to maintain margins and pricing discipline."
The Switzerland-based insurer said Thursday net profit for the three months to the end of March fell to $637 million from $935 million in the year-earlier period as five natural disasters in Australia, New Zealand and Japan cost the company $517 million.
The figure fell short of market expectations for net profit of $723 million as the company also suffered from weaker business in the U.S. and Europe, which partly led to a depression of premium income.
While gross written premiums in the company's nonlife business rose 1% to $10.1 billion as Zurich Financial was able to lift prices, gross written premiums in its life business fell 5% to $6.38 billion.
Zurich said that new distribution agreements in Europe and Latin America should help it going forward. "Our alliance in Latin America with Banco Santander will enable us to access millions of new customers in Brazil, Mexico, Chile, Argentina and Uruguay," said Chief Executive Martin Senn. The deal with Santander, which was announced in February, was followed by the recent renewal of the insurer's distribution agreement with Deutsche Bank AG.