Flood losses cut Zurich UK GI profit by 37% in Q1

Zurich’s UK general insurance (GI) business made an operating profit of £22m in the first quarter of 2014, down 37% on the £35m it made in the same period last year.

The combined operating ratio (COR) increased by 2.5 percentage points 99.1% (Q1 2013: 96.6%).

Zurich said that it had fewer large losses in the quarter, but that this was offset by weather-related claims and strengthening of prior-year reserves.

In addition, the expense ratio increased to 29.1% from 28.6% as a result of increased investment in the company’s personal lines proposition and higher pension costs.

Gross written premium was almost flat at £313m (Q1 2013: £311m).

Zurich UK general insurance chief executive Steve Lewis said: “It’s been a tough start to the year for many of our customers thanks to the atrocious weather, and that has of course affected our performance for the first quarter.

“But it’s important to put that in perspective. Our strategy to write business at a price that’s sustainable for us and our customers continues to be the right one, and our overall portfolio of business remains in good shape.”