Zurich H1 Net up 33% to $2.684 Billion

Zurich Financial Services Group turned in a strong first half performance with net income rising 33.3 percent to $2.684 billion. Return on common shareholders equity (ROE) rose to 22.3 percent, while business operating profit (BOP) increased by 12 percent to $3.3 billion.

“These excellent results reflect our ability to successfully leverage a strong balance sheet through disciplined underwriting, targeted growth and operational efficiency, particularly given the current global financial environment,” noted CEO James J. Schiro. “Together with our well-diversified book of business, these underlying strengths continue to underpin the delivery of consistent shareholder value and top tier financial results.”

Other earnings highlights included the following:
— General Insurance gross written premiums and policy fees of $19.0 billion, up 3 percent or largely flat in local currency, and a combined ratio of 96.5 percent, a 2.0 percentage point increase primarily as a result of UK storms and floods in June
— Global Life new business value up 51 percent, with new business margin ( percent of APE) of 24.1 percent5 and APE up 12 percent or 5 percent in local currency
— Farmers Management Services’ management fees and other related revenues up 4 percent to $1.1 billion
— Shareholders’ equity of $26.1 billion, an increase of 2 percent over year end after both paying the dividend and completing the share buyback

In Zurich’s General Insurance sector business operating profit at the half year was up $51 million to $1.8 billion. The figure includes a “total charge of $566 million for claims payments related to winter storm Kyrill and the UK floods during June 2007,” said the bulletin. “These extreme weather conditions in Europe added 3.9 percentage points to the combined ratio, while operating performance was favorably impacted by reserve releases for earlier years of $390 million. As a consequence, the final six-month combined ratio increased 2.0 percentage points to 96.5 percent.”

Farmers’ management fees and other related revenues grew by four percent to $1.1 billion. The Farmers Exchanges, which Zurich manages but does not own, also achieved premium growth of five percent in the first half of the year despite flat market conditions, while Farmers’ business operating profit was up seven percent to $672 million and the operating margin improved to 49.5 percent from 47.9 percent in the first quarter.

The full report is available on the Group’s web site at: www.zurich.com. A replay of the analysts’ and media earnings conference call will also be available on the site later today.

Source: Zurich