Insurer sees profits in the wake of 2011 catastrophes
Zurich Insurance Group, Switzerland’s largest insurance company, has released information concerning its first quarter profits for this year. The company posted high profits this year after overcoming the challenges presented by the past two consecutive years of natural disasters. Last year’s catastrophes broke record losses throughout the world, leaving many insurance companies in a vulnerable position. Large insurers, like Zurich, have been able to recover from the disasters and have even shown promising growth in the first quarter of 2012.
Zurich notes that profits are up by 78% in the first quarter
According to Zurich, profits in the first quarter of this year spiked by 78% as claims from natural disasters diminished. The company’s net income rose to $1.14 billion from $640 million in the same period of the previous year. This is above the $1.06 million net income that was estimated by analysts. Zurich associates the profits with a somewhat lenient beginning of the year in terms of weather. Natural disaster claims remained low for the first quarter, allowing the company to catch up with outstanding claims from 2011.
Insurer overcomes the struggles of last year
Last year, five major natural disasters brought more than $517 million in claims to the insurer. These disasters included floods in Australia and earthquakes in New Zealand and Japan. The insurer also faced down extreme weather conditions in the U.S. through its subsidiary Farmers Insurance Group. Widespread tornadoes and hailstorms have caused a significant amount of damage to homes and business in the Southeastern portion of the state, spurring insured losses. Though these disasters were troublesome in terms of finances, Zurich was able to overcome the challenge with the help of relatively peaceful weather in Europe.
Calm year may bode well for the global insurance industry
This year has been host to some disastrous weather events, but is not on track to being as devastating as its predecessor. If this calm trend continues, the global insurance industry may be poised to experience record profits. This may change, however, as hurricane season begins in the U.S. on June 1 of this year.