The first half of Zurich Financial burdened by provisions
Zurich Financial Services, Fourth European insurer, has seen its profits decline by 10% in first half as a result of provisions for defective mortgage loans and an increase in claims, including the earthquake in Chile.
The net profit of down 16% to $ 1.64 billion in the first half, against $ 1.97 billion during the corresponding period of 2009, Zurich Financial announced Thursday, said in a statement.
Operating profit activities (Business Operating Profit, BOP) declined 10% to 2.23 billion against $ 2.55 billion.
These declines are attributed to 330 million of provisions recorded in the second quarter in commercial real estate in Great Britain and Ireland.
In the first quarter, the group had recorded $ 200 million because of the earthquake in Chile.
Total depreciation amounted to 763 million during the first six months of 2010.
Zurich Financial has, however gains in net capital investment and depreciation of 418 million.
As usual, ZFS did not provide guidance for the full year.
The combined ratio deteriorated to 98% at end June 2010 against 96.2% a year earlier, and return on equity has deteriorated to 11.5% after 17.6%.
The solvency ratio has however improved to 232% at the end of the period under review.
Business volumes have expanded from 3% to 34.9 billion dollars, and 1% in local currency.
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