ZURICH (Reuters) - Zurich Insurance's (S:ZURN) first-half operating profit fell 40% to $1.7 billion, the Swiss company said on Thursday, as payouts linked to the COVID-19 pandemic and weaker financial markets dented its business.
The company said while its underlying business was broadly in line with last year, the new coronavirus outbreak had reduced its business operating profit (BOP) by $686 million. The figure was roughly line with analyst forecasts for $1.69 billion.
Europe's fifth-largest insurer said it expected COVID-19 related insurance claims at its Property & Casualty business to be $750 million for the full year, the same level as it indicated in May.
Net profit fell 42% to $1.18 billion, also in line with consensus forecasts. The combined ratio at its property and casualty business, which measures the profitability and financial health of insurance companies, worsened to 99.8% from 95.1% a year earlier.
Chief Executive Mario Greco said Zurich had seen an unprecedented first half, marked by events ranging from global pandemic and recession, to civil unrest and a higher rate of natural catastrophes.
"Our business developed well in the first six months of the year in spite of the uncertainties," Greco said. "Our commercial business reported strong growth following improvements to the portfolio mix in recent years, and is positioned to further benefit from the improved pricing environment."
In its updated outlook, the company said it expected insurance prices in its property and casualty business to increase this year, offsetting lower demand due to lower economic activity and less travel caused by coronavirus-related restrictions.
Zurich said it expected its full-year net earned premium would be around the same level as 2019.