Zurich profits driven by sales of Life Insurance

Friday, May 14, 2010

The largest insurance company in Switzerland, ‘Zurich Financial Services’, has reported a 76 per cent increase in profit for the first quarter of 2010.

This was largely driven by high sales of life insurance policies according to the company.

Zurich’s net income rose considerably from $532 million in the first quarter of 2009 to an impressive $935 million which exceeded expectations of many analysts as they all predicted a lower net income.

These increased profits were all the more impressive given the $200 million claim that was paid out as a result of the earthquake in Chile and the $30 million claim from the European winter storm Xanthia.

The company’s life insurance division had a highly successful quarter with operating profits up to 58 per cent to $351 million, this is largely attributed to the 23% increase in gross written premiums to $6.77 billion.

On top of the increased life insurance policy sales, the 2.3% price increase on Zurich’s products also helped to widen profit margins for the insurer.

The combined ratio of the company, however, did move from 95.8% a year ago to 99%, nearing the 100% figure that would speak volumes, validating that the company is making an underwriting loss.

The losses gained from the Deepwater Horizon drilling rig are to be booked in the second quarter of the year and are currently estimated to be around the $20 million figure.