Zurich Financial Services has reported a 75 per cent slump in first-quarter profit after suffering $1 billion (SFr1.14 billion) in losses and impairments.

The group said profit had fallen to $362 million after it posted a gain of $1.43 billion in the same quarter last year. Zurich said in a statement that 2009 would remain "challenging".

It added that general insurance premiums fell 12 per cent to $9.81 billion due largely to a weak United States market.

The result was far behind the average forecast of $639 million in a Reuters poll of ten analysts.

However, Zurich's chief executive, James Schiro, said the results demonstrated the group's ability to stay profitable despite the current financial crisis.

The company last month announced it was buying the American International Group's car insurance unit, US Personal Auto Group, for $1.9 billion (SFr2.18 billion).

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