Zurich insurance group Expects q4 2015 Loss in standard insurance

Zurich coverage group AG fell to the lowest in greater than 3 years after Switzerland’s biggest insurer positioned shareholders on notice that it expects a 2d straight quarterly loss in its trendy coverage business.

running losses in the non-lifestyles unit will probably amount to about $one hundred million for the remaining three months of 2015, the organization said in a assertion Wednesday. That displays an anticipated $275 million in claims from 3 storms that flooded hundreds of houses in northern England, Scotland and ireland in December.

Zurich plans to hurry up fee cuts and desires to exceed its 2016 target of $300 million in savings, in line with the declaration. The organization will book $475 million in fees associated with those measures, mainly inside popular coverage.

“expectations for the fourth region had been as a substitute low due to ongoing restructuring at the overall insurance unit,” said Daniel Bischof, an analyst at Baader Helvea who recommends shopping for Zurich’s stocks. “The extent of the hit they took is though disappointing, and it remains to be visible whether or not this turned into a final smooth-up or more wishes to be done to restore the unit.”

Zurich fell as a good deal as nine percent to 224.2 francs, the bottom considering that November 2012. The stock become trading nine percent lower as of 12:38 p.m. after declining 23 percent over the 365 days via Tuesday.

CEO seek

The December storms got here at a hard time for Zurich, one of the world’s biggest insurance agencies with a few fifty five,000 personnel. The employer is restructuring non-existence — its largest supply of profits from premiums — after the unit published a loss of $183 million for the 1/3 area. Zurich became compelled to abandon a excessive-profile takeover bid for RSA insurance %., and Martin Senn has considering stepped down as chief government officer.

A key query for buyers is whether or not Zurich will cut its dividend and the way it's going to use about $2 billion in excess capital. The insurer has paid out 17 francs a share each yr on the grounds that 2010 and has the very best dividend yield among Swiss shares and eu coverage organizations.

Zurich will probable stick to that policy, stated Vontobel analyst Stefan Schuermann, who maintained his keep score but diminished his full-12 months outlook for profits in step with proportion by 23 percent to 15.4 francs.

job Cuts

Sylvia Gäumann, a Zurich spokeswoman, stated by telephone that the dividend will stay “attractive” and “sustainable,” however declined to touch upon the possibility of a reduce. She reaffirmed that the agency is reducing jobs in the U.okay. and Germany and said it's far reviewing pricing strategies and increasing the use of reinsurance inside the non-life unit.

beyond natural failures, the corporation incurred a “very excessive” stage of big losses from injuries inside the fourth region, inclusive of several full-size assets claims. the global company unit changed into affected, along with commercial enterprise in some eu international locations that weren’t diagnosed inside the statement.

Zurich said it will offer extra facts on the non- life unit and on expectations for 2016 results when it reports on Feb. 11. working outcomes for the farmer and global lifestyles devices “must be in step with expectancies,” the organisation said, adding that its capital position remains “very robust.”