Zurich gains despite disaster
INSURER Zurich Financial took a $1bn hit on natural disasters last year but still plans to pay a bumper dividend after increasing profits by 10 per cent.
Overall net income for 2011 amounted to $3.766bn, missing the $4.041bn expected by analysts, but the Swiss firm said it would pay a dividend of SFr17 per share – unchanged from last year – despite a turbulent 12 months for the insurance industry.
Martin Senn, chief executive, said: “We delivered a good result in a year characterised by natural catastrophes, including devastating earthquakes in Japan and New Zealand as well as exceptional weather-related losses around the globe.
“This trend continued during the fourth quarter with flooding in Thailand and aftershocks in New Zealand.”
The earthquake and tsunami in Japan last March was one of the costliest natural catastrophes in the history of global insurers, having caused insured losses of between $12bn and $25bn for the industry, risk modelling firm Eqecat has said.
In the final three months of the year Zurich’s net income declined 46 per cent to $557m, after being hit by the effect of floods in Thailand.
Europe’s fourth-largest insurer by market value said it was well-placed to weather the crisis in the Eurozone, however. It has eliminated holdings of Greek government bonds.
“The group continues its disciplined approach and closely monitors its investments in euro zone peripheral government debt to ensure risk is well balanced and diversified,” Zurich said in a statement. As of the end of last year, the Swiss-listed firm held 66 billion of sovereign debt. It has eight per cent of that sum in Italian, seven per cent in Spanish and one per cent in Portuguese bond holdings.
In Britain the firm’s general insurance business saw a five per cent fall in gross written premiums to £1.719bn. The business operating profit soared 23 per cent to £159m.