Zurich Insurance forecasts $100 million nonlife fourth-quarter lossPosted On: Jan. 20, 2016 12:00 AM CST
Zurich Insurance Group Ltd. said Wednesday that it expects its nonlife operations to record an operating loss of about $100 million for the fourth quarter of 2015 because of natural catastrophe claims, including losses from a series of storms in the United Kingdom and Ireland among other things.
The Zurich-based insurer said it expected claims of about $275 million for storms Desmond, Eva and Frank, which hit in December, causing widespread flooding in areas of northern England, Scotland and Ireland.
Zurich said that in addition to those claims, there had been a number of other natural catastrophe events in the fourth quarter of 2015, including a tornado in Australia.
The insurer added that it had experienced a high level of sizable losses in the fourth quarter, including a large credit and surety loss and several significant property claims.
“The profitability of business underwritten in 2015 continues to impact results, but this will improve over the course of 2016 as the steps taken to reduce exposure to large losses take effect,” the company said in a statement.
Zurich is slated to report annual results for 2015 on Feb. 11.
The insurer has undertaken a review of its nonlife insurance business and will provide an update on the steps taken as a result of that review when it reports its annual results, it said.
Zurich said it had accelerated a number of steps in its efficiency program in order to exceed the previously announced cost-saving target of $300 million for 2016.
This will result in charges of about $475 million for the fourth quarter of 2015 that primarily will fall within the nonlife division.
Zurich also expects to incur a one-off impairment charge of $230 million stemming from the write-off of goodwill in its German life business.