Zurich Insurance Group said on Thursday it would miss a year-end target for its largest business, General Insurance, taking the shine off better-than-expected net profits two weeks before it is due to update investors on its business.
Zurich said it was on track to achieve some of the three-year targets it set in 2010, notably those for Global Life and expense management.
But others in General Insurance and its U.S. operation Farmers would not be achieved.
Zurich said it would miss its General Insurance goal of improving its combined ratio, a measure of profitability, by three to four points compared to competitors.
It will provide an update and announce new goals at an investor day on Dec. 5.
The company flagged the likelihood it would miss the targets with its second-quarter results in August, saying low interest rates were weighing on investment income.
Third quarter net profit for the insurer rose 64 percent to $1.103 billion, compared with $1.048 billion forecast in a Reuters poll of analysts.
The prior-year period saw Zurich take a $550 million hit to profit after a review showed its German arm had not set enough money aside to cover claims made years after policies expired.
An improved underwriting result and expense management helped operating profit in General Insurance, compensating for reduced investment income and losses from natural catastrophes, including floods and hail in Europe, the firm said.
In General Insurance its combined ratio improved to 94.7 percent in the third quarter. (Reporting by Alice Baghdjian; Editing by John Stonestreet)
Source: Reuters
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