Core profit up but net profit down at Zurich

swissinfo.ch

The Anglo-Swiss insurance giant Zurich Financial Services Group saw its normalised net profit figure for the first six months of the year climb 21 per cent to $1.1 billion (SFr1.9 billion).

Normalised net profit better reflects the company’s core business as it excludes potentially volatile gains or losses from capital investments.

However the group’s net profit rate, which includes capital fluctuations, actually dropped back by 24 per cent at $1.3 billion over the same period, as Zurich Financial Services cut back on capital gains. The company said that the fall in the net profit rate reflected less buoyant capital markets.

Both figures fell well short of analysts’ expectations. Most had forecast a normalised profit of around $1.3 billion and a net profit of $1.7 billion.

“We are pleased with the progress of the group. The underlying earnings improved in virtually all of our businesses and I look forward to a successful full year,” said chairman and chief executive of the group, Rolf Hüppi.

Zurich Financial Services was formed in September 1998 through the merger of Switzerland’s the Zurich Group and the financial services division of the British-based BAT Industries.

Zurich Financial Services is the holding company of a globally operating group of companies active in the fields of life, non-life and re-insurance as well as asset management.

Since its creation in 1998 the company’s complex company structure has come in for some criticism. But the group said on Wednesday it expected the unification of its shares and holding company structure to be completed in October.

“Significant progress has been made in achieving the previously announced, and shareholder approved, share unification. Almost all of the regulatory approvals have been obtained. Barring any unforeseen developments, a final closing will occur in October,” the company said in a statement.

On closing, Zurich Financial Services will have a primary stock market listing in Switzerland and a secondary listing in Britain.

swissinfo with agencies