By John Letzing and Neil MacLucas
ZURICH-Zurich Insurance Group AG (ZURN.VX) on Thursday reported
a 27% decline in net income for the second quarter, as the flooding
in Eastern and Central Europe and U.S. tornadoes dragged on
earnings.
"The economic environment remains challenging with continued low
interest rates exerting pressure on our investment income," Chief
Executive Officer Martin Senn said in a statement.
Overall, Zurich's net profit in the three months to June fell to
$789 million ($846 million) from $1.087 billion in the same period
last year. Business operating profit dropped 18% to $937
million.
The insurer said it's on track to achieve some of its 3-year
targets set in 2010 "such as those set for Global Life and expense
savings, while others, such as in General Insurance and in Farmers,
remain more challenging."
Zurich's general insurance business reported a 3% first-half
increase in gross written premiums and policy fees, to $19.77
billion, while the combined ratio, a measure of how much is paid
out on claims and other costs per dollar earned, was 95.6%--up from
94.8% in the period last year. A ratio of less than 100% means an
insurer is seeing profits from its core underwriting business.
Zurich said its second-quarter return on common shareholders'
equity was 9.6%, compared with 13.6% in the same period last
year.
-Write to neil.maclucas@wsj.com
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