Strong Q1 for Zurich

by David Masters

Story link: Strong Q1 for Zurich

Zurich Financial Services Group has reported its first quarter results, with net profit up 3% on year despite a higher number of claims.

The Switzerland-based insurance provider - the fourth largest in Europe - reported total net profit of $1.43 billion. This is compared to $1.39 billion for the first quarter of 2007.

The results exceeded analysts expectations. Estimates had been influenced by the difficult market conditions and strong competition in the insurance sector.

Overall, premiums in real terms were up 2%, whilst combined ratio also increased to 94.6%, compared to 93.3% in the same period last year.

The increase in profits was largely achieved through Zurich’s current focus on cost cutting measures. The company is currently on track to reduce costs $800 million every year up to 2010.

Tax benefits, reserve releases, and the weak dollar also helped to boost the group’s performance.

Chief Executive James J. Schiro said he is ‘proud’ of the ’strong results’.

Analysts have said that the results represent a strong performance, but have questioned Zurich’s ability to maintain high profitability through cost cutting measures alone.