Zurich Financial reports 76 pct rise in Q1 profit

[May 06, 2010]  GENEVA (AP) -- Swiss insurer Zurich Financial Services Group reported a 76 percent jump in first-quarter net profit Thursday despite paying out more for natural disasters during the period.

Net income rose to $935 million from $362 million in the same quarter last year, beating analyst forecasts.

Profits in the general insurance business dropped 30 percent to $621 million, largely because of insured losses resulting from the Chile earthquake, the Zurich-based company said. Its combined ratio -- a measure of profitability in the insurance industry -- rose 3.3 percentage points to 99 percent. A level under 100 indicates profitability.

Profits from life insurance improved 23 percent to $183 million, while net return on investments improved 0.6 percentage points to 1 percent.

Fees from Zurich's management of U.S. personal insurer Farmers Exchanges rose 13 percent to $703 million.

Chief Financial Officer Dieter Wemmer said in a statement that the company expects "persisting uncertainty regarding the macroeconomic environment."

Analysts at Zuercher Kantonalbank rated the results as positive but noted that the company's own capital dropped by over $2 billion in part due to high dividend payments to shareholders.

Shares rose 0.3 percent to 235.20 Swiss francs ($209.87) on the Zurich exchange.

[Associated Press]

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