Zurich beats forecasts to hit £2.5bn profit

INSURANCE giant Zurich yesterday beat expectations as it unveiled net profits of $3.88bn (£2.5bn) for 2012, an increase of three per cent on last year, helped by healthy returns from the company’s investment division.

Although many other insurers have reported a largely disaster-free year, Zurich said it had suffered from “above average levels of catastrophe, large and weather-related losses” including superstorm Sandy and losses in Germany.

“We delivered a solid performance in 2012, a year characterised by ongoing economic challenges,” said chief executive Martin Senn.

“The integration of our acquired insurance businesses in Latin America and Malaysia is progressing well and contributing meaningfully to growth as evidenced in the strong contribution to profitability from these areas.”

Zurich’s combined ratio, a measure of underwriting profitability, was 98.4 per cent, compared to a forecast of 99.4 per cent.

Peter Eliot, an analyst at Berenberg, praised the company’s performance: “Zurich continues to benefit from strong trends in its business and from its geographical exposure. Strong premium rate increases are continuing to be put through, the life business is showing strong growth.”