Profits plunge at Zurich Financial

Zurich Financial Services, Switzerland's largest insurer, has seen its net income drop by 47 per cent in 2008.

The group announced on Thursday that business operating profit had dropped by 23 per cent to $5.2 billion (SFr6 billion), and resulted in a net income after tax of $3 billion in its full year results.

It followed an 87 per cent fall in fourth-quarter net profits, which the group blamed on losses and writedowns on investments amid the global financial turmoil.

Chief executive James Schiro said the last two months of the year had been very difficult but there was no need to raise further capital at this point.

The group had $1.1 billion in writedowns in the fourth quarter. It cut its dividend to SFr11 for 2008 per share from SFr15 in 2007 and announced an additional $200 million in cost cuts.

“Looking forward, we do not see significant improvements in the economic environment in the near term, but our strong balance sheet, operational capabilities and well-balanced portfolio of businesses position us well to continue executing on our strategy,” said Schiro.