Zurich Insurance expects its general insurance business to record an operating loss in the fourth quarter following claims due to natural catastrophes, including the storms and floods in the U.K. and Ireland.
Zurich Insurance estimates that the natural catastrophes in the U.K. and Ireland will lead to aggregate losses of $275 million to be included in the 2015 results, which are due for release on February 11, 2016, the company said in a statement today. The estimates are net of reinsurance and before tax.
The General Insurance unit will post a fourth-quarter operating loss of about $100 million because of the natural catastrophe claims. In addition to natural causes, Zurich also recorded «a very high level of large current accident year losses» in the fourth quarter, the company said. They related to a large credit and surety loss and several significant property claims.
Cost-Savings Program
Zurich Insurance is still planning to save costs amounting $300 million in 2016 as previously communicated by the company. The efforts to achieve this aim will result in charges of about $475 million in the fourth quarter, primarily within the General Insurance unit.
The Zurich-based insurer also anticipates incurring a one-time charge attributable to the write-off of its German Life business goodwill of approximately $230 million. These charges will be recorded outside of the fourth-quarter operating profit.
«While the 2015 results for General Insurance are disappointing, operating performance for both Farmers and Global Life should be in line with expectations, and the Group's capital position remains very strong across all key metrics,» the company said.
