Switzerland-based insurance giant Zurich Financial Services Group has booked net income of $2.7 billion in the first half of 2007, up 33% compared to the same period of 2006. The insurance firm also booked business operating profit of $3.3 billion, up 12%. Zurich's performance was driven by strong operating performances in all business segments.
In H1 2007, Zurich’s general insurance business booked operating profit up $51 million to $1.8 billion. The result includes a total charge of $566 million for claims payments related to winter storm Kyrill and the UK floods during June 2007. As a result of the weather conditions, the final six-month combined ratio increased two percentage points to 96.5%.
Meanwhile, gross written premiums and policy fees in general insurance recorded a 3% increase in dollar equivalent terms, but were largely flat in local currency.
Zurich’s global life insurance unit continued its focus on unit-linked and protection markets and posted a strong business operating profit of $721 million in the period, up 25%. New business value rose 51% to $319 million or 45% in local currencies. All key regions contributed to this result, with overall growth in new business annual premium equivalent of 12%, or 5% in local currencies, and a higher new business margin of 24.1%.
New business was exceptionally strong in emerging markets, up 35% in local currencies; in Ireland, up 30%; and in the US, up 11%, due to new product launches. Zurich said that growth in Germany, Italy and Spain remains a challenge, but recent new product launches plus further expansion plans in emerging markets will contribute to growth in the second half of the year.
These excellent results reflect our ability to successfully leverage a strong balance sheet through disciplined underwriting, targeted growth and operational efficiency, particularly given the current global financial environment, commented Zurich’s CEO, James Schiro. Together with our well-diversified book of business, these underlying strengths continue to underpin the delivery of consistent shareholder value and top tier financial results.