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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.

Chinese disaster slashes Zurich Insurance profits
Photo: File

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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INSURANCE

EXPLAINED: Why you need ‘legal protection insurance’ in Switzerland

Swiss insurance companies offer a variety of services, but the one covering legal disputes is among the most popular ones. This is what you should know about it.

EXPLAINED: Why you need 'legal protection insurance' in Switzerland
Law and order: Legal insurance may make it easier. Photo by Sora Shimazaki from Pexels

The Swiss like to be prepared for all kinds of disasters — both real and imaginary.

This is where insurance comes in.

Whether it’s a policy that covers damages inflicted on cars by weasels, or insurance for theft of sleds and skis placed outside a mountain restaurant, people here don’t like to leave anything to chance.

One of the most popular optional coverages — as opposed the health insurance, which is compulsory — is legal protection insurance (Rechtsschutzversicherungen in German, protection juridique in French, and protezione giuridica in Italian).

What is it and what does it cover?

Simply put, it covers attorney and other associated fees if you undertake court action against someone, are sued, or simply need legal advice.

There are two different types of legal protection insurance — one specifically for traffic accidents and the other for all other matters. Sometimes they are combined.

Typically, this insurance covers costs of legal representation associated with contract disputes, employment, loans and debts, healthcare, housing, retail purchases, and travel.

Photo by Rodnae Productions from Pexels

Some carriers also insure cases related to marital law and inheritance.

Most will not cover attorney fees for criminal cases where you are the perpetrator, or financial disputes related to asset management, banking and investment.

Also excluded is legal action related to political or religious activism.

Can you choose your own lawyer or will you have one assigned to you by the insurance company?

Typically, an insurer has a roster of approved attorneys with whom it works. Some allow the client to choose from the list, while  others select one for you.

If your own lawyer is part of your insurer’s roster, you can request he or she represents you, but it is not guaranteed.

How much does this insurance cost?

Fees vary depending on what coverage you need (traffic accidents, general, or combined), whether they have deductibles, and how high they are.

You can compare the premiums by using this link.

Do you actually need this coverage?

As is the case with any optional insurance, you don’t need it until you do.

Generally speaking, and according to online consumer comparison site Moneyland.ch, “if you require legal consultation at least once every two years, getting personal legal insurance often makes financial sense. Just the legal consultation benefits which you get with some insurance policies can make up for the cost of premiums”.

READ MORE: How much does health insurance cost in Switzerland?

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