Zurich Financial Services on Thursday posted a 13.2 per cent decrease in first half earnings. The poor performance was broadly in line with analysts' expectations after two profit warnings earlier this year.This content was published on September 6, 2001 - 14:40
Europe's third-largest insurer showed a first-half "normalised" net profit of SFr1.57 billion ($922 million), down from SFr1.87 billion for the comparable period in 2000. Normalised net profit is the company's main measure of sustainable profit, filtering out fluctuations in investment earnings and using fixed rates of return on shares and income securities.
Net profit measured under more widely used accounting methods fell by 32.9 per cent.
The company's chairman and chief executive, Rolf Hüppi, said in a statement that the firm had suffered from depressed equity markets, declining interest rates, a strong dollar and the weaker economic outlook.
However, Hüppi told swissinfo that its two-year restructuring programme, which includes an ambitious divestment policy, was going to plan.
New executive board
"First of all we have introduced a new group executive board, secondly we have created five global business divisions, and that has been done very successfully from a re-organisational point of view," explained Hüppi. "And from the investment and divestment point of view things are also progressing very well."
The group's shares have fallen more than 50 per cent this year to a level not seen for four years.
The company is in the middle of a two-year overhaul that includes an ambitious divestment policy. Hüppi said on Thursday that the previously announced spin-off of its reinsurance arm, Zurich Re, would take the form of a stock market listing.
The initial public offering is expected to take place in the fourth quarter of this year and should boost the firm's books for the year as a whole.
Hueppi also said that the company would shortly announce its plans regarding Zurich Scudder, its loss making US asset management business. Analysts say that Deutsche Bank is the frontrunner to buy the unit that is expected to fetch around SFr5.1 billion.
"What we decided earlier on was to look at the strategic alternatives available and we have taken outside help to do that," Hüppi explained to swissinfo. "We are in the final stages of that evaluation and I believe we should be in a position very shortly to make an announcement."
swissinfo with agencies
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