Despite reporting growth, one major insurer has fallen almost $100 million short of analysts’ predictions.
The 6 per cent increase reported by
Zurich reflects a net profit increase from $789 million to $837 million for the second quarter, as compared to the year-earlier period. That brought net profit to a rise of 13.9 per cent for the first half of 2014, to $2.11 billion.
All numbers are in U.S. funds.
Zurich said the operating profit of its general insurance business rose 20.7 per cent in the first half, to $1.652 billion. Gross written premiums and policy fees, meanwhile, rose 11.4 per cent to $19.995 billion.
However, the performance missed the $936 million mark expected by analysts.
A
Wall Street Journal report attributes the miss to “one-off charges” that pushed the company to a higher effective tax rate. A 4 per cent drop in operating profit from Zurich’s global life business also pushed growth down, with profits for the quarter ending at $634 million during the period.
Zurich Chief Executive Martin Senn was upbeat about the company’s performance, saying it had made “good progress” on the three-year restructuring plan that earlier cost Zurich some jobs and involvement in some businesses.
Zurich cut 670 jobs in the first quarter, which Senn said helped lower costs by $250 million annually. It also exited its general insurance business in Russia.
Zurich’s general insurance business is the company’s largest.
