Zurich braces for ‘Hurricane Charley’ fall-out

Switzerland-based insurance company Zurich Financial Services has nearly doubled its net income for the first half of 2004 pinning the rise on higher premium income, lower numbers of claims and an absence of large scale catastrophes.

However the positive results were soured by chief executive James Schiro predicting the company will be hit hard by insurance claims made in the wake of hurricane Charley which swept through America on August 13.

The company has reported a rise in net income for the first half of 2004 of 93 per cent up from US$ 752 million in the corresponding period in 2003 to $1,448 million generating an annualised return on equity of 16.8 per cent.

Gross written premiums in general insurance where up 6 per cent from 2003 while gross written premiums in the life insurance arm were down by 10 per cent. This decrease was attributed to recent moves by the group to reduce its exposure to under performing business.

“Zurich’s recovery continues. Success is coming from the sharp focus on core businesses, financial discipline and sound underwriting,” Schiro says.

Schiro returned the company to profitability in 2003 after cutting jobs, raising premiums and selling off over $1 billion worth of business.

He predicts Zurich will lose $150 million as a result of Hurricane Charley.

“We know that the benign environment we have seen in the last 18 months . . . would not continue for ever. Now hurricane Charley has reminded us of that point rather painfully.”

Meanwhile, Zurich Australia has released a web-based mortality calculator that predicts when someone will die and their risk of experiencing serious illness or injury on the basis of there age, gender and smoking status.

“This minimizes time spent with clients and avoids what many advisers feel is an unnecessary disclosure of personal information,” says Zurich Australia life risk strategic marketing manager Mark Fabris.