zurich insurance

Advertisement Zurich Insurance Faces $275 Million in Storm Claims Costs
Costs will push the insurer’s general insurance unit to a fourth quarter operating loss

ZURICH— Zurich Insurance Group AG, an insurance giant that remains without a permanent chief executive, saw its shares fall sharply on Wednesday after it said that its largest unit has continued to suffer losses.

The Zurich-based firm said it expects to report about $275 million in losses as a result of recent storms in the U.K. and Ireland, pushing its beleaguered general insurance unit to an operating loss for the fourth quarter of last year.
Its shares were down by around 7.4% midmorning Wednesday. Switzerland’s SMI Index was down 2.7%.

Zurich Insurance, which is expected to report financial results on Feb. 11, said the expected losses are based on preliminary estimates of damage inflicted by the heavy rainfall and flooding that hit parts of North England, Scotland, and Ireland late last year. “The final cost remains uncertain,” the company said.

The expected fourth-quarter operating loss for the company’s general insurance unit, Zurich Insurance’s biggest business, comes after the same unit posted a $183 million operating loss in the third quarter. Overall, Zurich Insurance reported a 79% decline in net profit for the period.

The news of further losses comes shortly after the departure of former CEO Martin Senn, who stepped down last month. Mr. Senn’s exit was hastened by ongoing problems at the general insurance business, which Zurich Insurance has slated for roughly 200 job cuts.

In addition, problems at the general insurance business caused Zurich Insurance to back away in September of last year from an ambitious plan to acquire U.K.-based RSA Insurance Group PLC, in a deal that was potentially valued at more than $8 billion.

Mr. Senn has been replaced on an interim basis by Zurich Insurance Chairman Tom de Swaan. No permanent successor has yet been named. Advertisement