INSURANCE giant Zurich is likely to miss some of its long-term performance targets, its chief executive admitted yesterday, after being hammered by weak investment returns.
Shares in the Swiss company closed down 3.6 per cent after it announced claims from floods in central Europe and tornadoes in the US had cut second quarter profits by a quarter.
But investors were more concerned with the statement that poor bond yields would make it “more challenging” to meet targets at its US and general insurance business.
“The economic environment remains challenging with continued low interest rates exerting pressure on our investment income,” said boss Martin Senn.
Peter Eliot, an insurance analyst with Berenberg Bank, insisted that there were some “positive underlying developments” buried in the accounts, such as an improved underwriting performance.
Meanwhile, Zurich’s UK general insurance division boosted operating profits by 42 per cent to £81m, partly due to fewer payouts for flood damage.