Insurer Zurich Financial reports 51 percent drop in second-quarter net profit to $707 million

Zurich Financial sees Q2 profit halved to $707M

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’s cash reserves remain strong and the core business is stable, with particular promise in its Farmers Market unit, said Helvea’s Marc Effgen.

The company’s 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.