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Zurich posts strong first-half performance

Zurich Financial Services CEO James Schiro is pleased with the results Keystone Archive

Switzerland's second largest insurance company Zurich Financial Services (ZFS) says its half-year net profit has increased to $1.8 billion (SFr 2.27 billion).

This represents an improvement of 21 per cent on the same period in 2004 – beating analysts’ expectations.

Analysts had predicted an average of $1.635 billion half-year net profit for the company.

“The quality of the results has improved with all core businesses and group investments contributing to the bottom line, ” said Zurich chief executive James Schiro in a statement on Thursday.

“Key drivers of our strong performance were customer focus, operational excellence and talent development,” Schiro added.

The insurer said it had recorded strong results in its non-life business while its life business had improved.

Earnings per share for the first six months of 2005 were up by 20.8 per cent on last year.

Combined ratio

Gross written premiums and policy fees fell slightly by two per cent to $25.95 billion, while the group’s combined ratio – a key industry profitability indicator – slipped to 96.9 per cent from 96.6 per cent.

A figure over 100 per cent indicates an insurer is losing money on its underwriting.

The group said it was on track to meet its goal of generating operating improvements in its general and life insurance operations of $500 million in 2005.

Shares in Zurich, which is rounding off a lengthy restructuring programme that returned it to profitability after several loss-making years, have risen 24 per cent so far this year.

The latest results appear to confirm the turnaround in fortunes at the insurer. The strong half-year performance was based on “excellent results particularly in Germany and Switzerland, but also the emerging recovery in the United Kingdom,” a company statement said.

swissinfo with agencies

Net income of US$1.8 billion, an increase of 21 per cent.
Business operating profit up 17 per cent to $2.3 billion.
Gross written premiums down 2 per cent to $25.9 billion.

Founded in 1872, Zurich Financial Services is the insurance provider for the majority of Fortune magazine’s Global 100 Companies.

In 1912 the company was the first European insurer to move into the United States.

The group, which employs about 57,000 people, is the second largest insurer in Switzerland and the seventh largest in Europe.

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR

SWI - a branch of Swiss Broadcasting Corporation SRG SSR