Zurich misses profit target due to troubled German business

 
Michael Bow
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ZURICH Insurance shares plunged nearly four per cent to a three month low yesterday after missing third quarter profit targets.

The group, which does car and home insurance, saw net profit fall 62 per cent to $477m (£300m) compared to last year. For the nine months up until 30 September this year net profit was $2.7bn, a 16 per cent fall compared to last year’s profit as a result of poor performance from its German insurance division.

Shares fell 3.88 per cent to close at SFr223 yesterday as traders scurried to sell the stock.

Chief executive Martin Senn said: “While the third quarter was adversely affected by the previously reported adjustment in the German General Insurance business, we continue to see the benefit of our strong focus on pricing discipline and portfolio management.”

Overall gross written premiums, policy fees and insurance deposits increased by nine per cent versus the same period a year ago.

“We are particularly pleased with the robust performance in some mature markets, notably the US,” Senn said.

The insurance group’s investment performance also took a battering dropping 20 per cent compared to a year ago.

The firm delivered net investment increases on all the group’s investments of $6.1bn, down from $7.6bn in 2011.

It said currency movements, lower reinvestments and lower capital gains on investments all contributed to the fall.