Zurich slides in fourth quarter

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20 February 2012

Zurich has posted a steep fall in fourth-quarter net income but still grew year-on-year after a tough 12 months of natural catastrophes and staid investments.

The Swiss global insurer’s fourth-quarter net income fell by 46% to $US557 million ($518 million) due to a higher tax rate, catastrophe losses and a $US100 million ($92.9 million) donation to Zurich’s in-house charity, Z Zurich Foundation.

Of the $US1 billion ($929 million) in losses Zurich incurred during the year from natural disasters, $US225 million ($209 million) was borne in the final quarter.

Despite the final quarter downturn, Zurich finished the year with a 10% increase in net income to $US3.766 billion ($3.5 billion), a 5% rise in gross written premiums to $US34.572 billion ($32.15 billion) and an unchanged dividend of 17CHF ($17.20).

“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,” CEO Martin Senn said.

“This trend continued during the fourth quarter with flooding in Thailand and aftershocks in New Zealand.

“In challenging economic and market conditions, we maintained our focus on underwriting discipline while continuing to selectively grow the business.”

Dampening the group’s full-year results was a 0.9% rise in the combined ratio to 98.8% and a 15% decline in general insurance operating profit to $US2.265 billion ($2.1 billion).

Full-year business operation profit also fell 2.6 percentage points to 10.2% – well shy of the group’s 16% long-term target.