Zurich Financial Services has announced a massive loss of $2.03 billion (SFr3 billion) in the first half, down from an $861 million profit a year ago.This content was published on September 5, 2002 - 08:45
The company said it planned to cut 4,500 jobs as part of a $500 million restructuring drive to help shore up its financial situation.
As was widely predicted, Zurich also revealed plans to issue new shares worth $2.0-2.5 billion to help pay for special provisions of $2.7 billion to strengthen its capital base.
About 2,000 of the job cuts will affect workers at company headquarters in Switzerland, as well as in Britain, Ireland and South Africa. An additional 700 positions will be cut in Germany.
The company, like the entire insurance industry, has been battered by tumbling stock prices.
Zurich CEO James Schiro said the group had reviewed its strategy and operations and had decided to sharpen its focus as an international insurance-based financial service provider.
"The initiatives we announced today should create a sound financial and operational platform for Zurich from which to deliver a solid earnings growth."
"We believe this to be in the best interest of the Group, its shareholders, customers and employees."
Europe's third largest insurer said it was seeking to restore profitability and investor confidence.
The losses went way beyond analysts' estimates, which had ranged from a $145 million loss to a profit of $326 million.
swissinfo with agencies
Zurich's net loss for the first half is $2.03 billion.
Last year's figures for the same period - $861 million profit.
4,500 jobs are to go, representing six per cent of the total workforce.
New shares worth $2.0-2.5 billion are to be issued.
Zurich intends to bolster capital by around $5 billion via rights issue and by savings of $2.5-2.7 billion.
Analysts had predicted a range of losses of $145 million to profits of $326 million.