The insurer’s third quarter profit fell by 62 percent.
Zurich insurance news is now showing that the company will not be ruling out additional write-downs because of its struggling and bothersome German unit, as it has third quarter report is now revealing a drop of 62 percent in its net profits.
The largest insurer in Switzerland has been accumulating almost $1 billion in additional costs since 2012.
Those extra charges are the direct result of its business in Germany. In October, the group cautioned that any efforts for increasing claims provisions within the German unit would be shaving approximately $390 million off of the third quarter’s income. This has meant that the net profit seen by Zurich insurance news over the three months that ended in September, brought about $477 million, which was a massive plunge from the $1.2 billion seen at the same time last year.
A Bloomberg insurance news poll had suggested that analysts felt there would be profits of $719 million.
At the moment, the German operations of Zurich are being reviewed by the insurer. However, the chief financial officer, Pierre Wauthier, released an insurance news statement that said that “the bulk of the problem” had already been managed, and that the issue was specific to the unit in Germany. That said, additional write-downs were not entirely ruled out.
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Within that insurance news statement, Wauthier explained that “Putting finality on anything in the insurance business, which by its very nature is uncertain, is difficult.” He then went on to add that “Should there be any further developments, they would be much smaller.”
There was a total business volume improvement of 5 percent during that time. This data includes policy fees, written premiums, management fees, and insurance deposits. It brought the level to $16.5 billion. This was boosted by a strong U.S. and Latin American performance.
In overall insurance news, their general operating profits – which made up over half of the business at Zurich – had increased by 5 percent, with the German write-downs having been offset by the fact that the natural disaster claims were quite low, and the cost management and underwriting was notably improved.