Zurich Insurance Posts Sharp Fall in Profit

ZURICH—Zurich Insurance Group AG on Thursday reported a 79% decline in net profit for the third quarter, a period in which the firm had to call off a significant acquisition intended to bolster its financial performance.

The Zurich-based insurance company said net profit in the period ended in September fell to $207 million from $966 million a year earlier. Analysts had expected a net profit of $222 million.

Gross written premiums and policy fees fell to $12.3 billion from $12.9 billion, Zurich Insurance said. The company said its total return on group investments in the quarter was 1.1%, compared with 1.5% a year earlier.

The general insurance business, Zurich Insurance's largest unit, reported a combined ratio of 108.9% for the quarter. The combined ratio is a measure of how much is paid on claims and costs for each dollar earned, and a ratio of less than 100% means that an insurance firm's underwriting business is profitable.

The company's general insurance business reported an operating loss of $183 million for the quarter.

In September, Zurich Insurance ended its pursuit of a potential $8.8 billion acquisition of U.K.-based RSA Insurance Group PLC. The deal would have further contributed to an increase in mergers and acquisitions in the global insurance industry, which faces a combination of anemic profit growth and low investment returns.

Zurich Insurance said at that time that it was calling of the acquisition due to mounting difficulties at its general insurance business, and flagged the unit's anticipated quarterly loss.

Zurich Insurance said at that time that its troubles included expected losses of about $275 million as a result of the deadly explosions at a port in Tianjin, China, in August.

On Thursday, Zurich Insurance said its continuing review of the general insurance business has led it to consider options including "repricing or exiting a number of underperforming portfolios," in addition to cutting costs.

Write to John Letzing at john.letzing@wsj.com

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(END) Dow Jones Newswires

November 05, 2015 02:15 ET (07:15 GMT)

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