ZURICH--Zurich Insurance Group AG (ZURN.VX) on Thursday reported
a 7% decline in profit for the first quarter, citing a "challenging
economic environment" that ate into investment returns, but pointed
to a strong performance across insurance lines and said it remains
on track to meet its targets.
"This is actually one of the strongest quarterly results over
the last two years," Zurich Chief Financial Officer Pierre Wauthier
said during a conference call, adding that Zurich's insurance
businesses "largely offset the lower investment result."
Zurich said operating profit from general insurance, the
company's biggest business, fell 6% to $807 million in the period.
The company cited "persistent lower yields and less favorable
development of reserves established in prior years."
The general insurance business posted a 2% increase in gross
written premiums and policy fees, to $10.69 billion.
Zurich's business of selling life and pension products saw
operating profit increase 6% to $308 million, thanks to lower
expenses and contributions from Zurich Santander.
Overall, Zurich said net profit fell to $1.06 billion from $1.14
billion in the same period last year. Business operating profit was
down slightly at $1.35 billion.
Analysts had expected a net profit of $1.16 billion.
The company's combined ratio, a measure of how much is paid out
on claims and other costs per dollar earned, was 94.9%--up slightly
from 94.6% in the period last year. A ratio of less than 100% means
an insurer is wringing profits from its core underwriting
business.
Zurich posted a return on common shareholders' equity of 12.3%,
compared with 14.4% in the period last year.
Write to John Letzing at john.letzing@wsj.com
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