GENEVA – Swiss insurer Zurich Financial Services Group reported a 51 percent drop in the second-quarter net profits to $707 million as earnings were hit by payouts for weather-related losses and the earthquake in Chile.
This compares with a profit of $1.43 billion during the same period last year.
The Zurich-based company says investment income fell and it took in less insurance premiums than during the second quarter of 2009. Premiums and policy fees fell 5 percent to $10.67 billion during the quarter.
Zurich noted that results also suffered because of provisions worth over $330 million it has made for commercial property development loans in Britain and Ireland.
Analysts gave a muted response to the results, noting that they were largely in line with expectations despite higher disaster payouts.
Zurich%27s cash reserves remain strong and the core business is stable, with particular promise in its Farmers Market unit, said Helvea%27s Marc Effgen.
The company%27s combined ratio for the first six months dipped slightly to 96.9 percent from 96.7 percent in the same period last year. A combined ratio below 100 percent indicates profitability in the insurance industry.
Shares closed down 4.3 percent at 238.90 Swiss francs ($228.30) on the Zurich exchange.