Chinese disaster slashes Zurich Insurance profits
Zurich Insurance on Thursday said third-quarter profits fell 79 percent, after the company was hit with $275 million (€254 million) in losses following the industrial disaster in Tianjin, China.
Switzerland's largest insurance provider posted after-tax profits of $207 million, down from $966 million over the same period last year, a plunge also linked to poor performance in its general insurance unit.
The firm's performance was below projections from analysts polled by the AWP agency, who had expected profits of $241 million.
Chief executive Martin Senn said in a statement that a "comprehensive review" of the business aimed at restoring profitability would lead to changes in the management structure and job cuts.
In September, Zurich warned that it faced significant losses after massive explosions at a hazardous goods storage firm in Tianjin, in northeastern China on August 12 killed 161 people.
The company still has a projected $3 billion in excess capital on its books, funds that had been set aside as part of its failed attempt to takeover rival insurer RSA.
Some of those funds could be paid out to investors, on top of regular dividend payments, but detailed plans for the allocation of its excess capital will not be laid out until February, when full year results are released, the company said.
Through the first nine months of 2015, Zurich's profits have fallen 27 percent compared to last year, but the company said it was confident of improved performance in 2016.
"The review of the business is on track," the statement said, noting that cost-cutting measures were being implemented and that employees had been warned "about a planned headcount reduction."
Zurich's stock stayed mostly flat through early trading, hovering around 267 Swiss francs ($267 dollars) per share, on a slightly higher Swiss market.
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Switzerland's largest insurance provider posted after-tax profits of $207 million, down from $966 million over the same period last year, a plunge also linked to poor performance in its general insurance unit.
The firm's performance was below projections from analysts polled by the AWP agency, who had expected profits of $241 million.
Chief executive Martin Senn said in a statement that a "comprehensive review" of the business aimed at restoring profitability would lead to changes in the management structure and job cuts.
In September, Zurich warned that it faced significant losses after massive explosions at a hazardous goods storage firm in Tianjin, in northeastern China on August 12 killed 161 people.
The company still has a projected $3 billion in excess capital on its books, funds that had been set aside as part of its failed attempt to takeover rival insurer RSA.
Some of those funds could be paid out to investors, on top of regular dividend payments, but detailed plans for the allocation of its excess capital will not be laid out until February, when full year results are released, the company said.
Through the first nine months of 2015, Zurich's profits have fallen 27 percent compared to last year, but the company said it was confident of improved performance in 2016.
"The review of the business is on track," the statement said, noting that cost-cutting measures were being implemented and that employees had been warned "about a planned headcount reduction."
Zurich's stock stayed mostly flat through early trading, hovering around 267 Swiss francs ($267 dollars) per share, on a slightly higher Swiss market.
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