Zurich reports fall in GI profit but rise in COR

Zurich has reported a 2% fall in general insurance business operating profit to $3.5bn (£2.2bn) in 2009, compared to the previous year, however, in local currencies it increased by 1%.

It attributed this to an improved underwriting result partially offset by lower investment income.

Zurich said that combined ratio improved to 96.8%, compared to 98.1% in 2008, due to careful underwriting practices and lower levels of natural catastrophe losses.

Gross written premiums and policy fees decreased 4% in local currencies, mainly driven by lower volumes in North America and difficult market conditions in Western Europe.

In a statement, Zurich said: “Across the segment’s commercial businesses, comprising large corporate customers as well as small and mid-sized commercial firms, a continued focus on differentiated rate actions and underwriting discipline generated strong operating performances, with average rate increases of 4%.

“Global Corporate achieved a significant improvement in profitability, with the remaining commercial businesses maintaining a solid operating performance. The ability to capitalize on growth opportunities in targeted market segments helped to mitigate the impact of pricing discipline and lower economic activity on volumes, which particularly affected certain market segments in North America. Underwriting results and profitability also benefited from a more favourable loss experience, including lower levels of natural catastrophe losses.

“The segment’s personal lines businesses generally performed well, while operating in a continually competitive environment. Profitability was impacted by industry-wide weak results in the motor business in Italy and the UK, reflecting the challenges posed by the economic and competitive market environment in these two European markets. Decisive underwriting actions across these areas also impacted the ability to grow volumes. Latin America achieved significant growth in local currency terms through both organic growth and as a result of an acquisition in Brazil in 2008.”