The top Swiss insurer said in a statement released on Thursday that its net income dropped to $3.9 billion in 2014 from the previous year, while turnover increased by six percent to $74.43 billion.
Operating profit meanwhile declined one percent from the preceding year to $4.64 billion.
Chief Executive Officer Martin Senn said the results were "below expectations," saying the insurance industry was buffeted by "external headwinds" and a tough macroeconomic environment.
Zurich Insurance spokeswoman Sylvia Gaumann also blamed the lower profit on a $247-million loss in the fourth quarter over the sale of a Russian retail business.
The bank had announced it would suffer such a loss back in October, although it anticipated a higher figure of around $300 million.
The Swiss stock market punished the firm as the share value dropped by 3.10 percent by the end of trading on Thursday while the main SMI index increased by 0.39 percent.
In the fourth quarter of last year, the firm's net profit dropped by 20 percent to $858 million, while its turnover increased 13 percent to $19.7 billion.
The insurer's board of directors proposed for 2014 a dividend of 17 francs per share, unchanged from the previous year.
ZURICH INSURANCE
Russian business sale hits Zurich’s bottom line
Swiss group Zurich Insurance says its net profit dropped three percent last year due to the sale of a Russian business and a tough economic environment.
Published: 12 February 2015 17:11 CET
Photo: Zurich Insurance Group
PROFITS
Profits boost makes 2016 ‘a very good year’ for Swiss insurer
Zurich Insurance said on Thursday its profits rose 74 percent in 2016, thanks to fewer claims and progress in its restructuring drive.
Published: 9 February 2017 17:17 CET
File photo: Fabrice Coffrini/AFP
Switzerland's largest insurer said in a statement net profit amounted to $3.2 billion (3.0 billion euros) last year, a huge increase over the figure for 2015 when the company was hit by heavy costs linked to the industrial disaster in Tianjin, China.
Chief executive Mario Greco, who has been on the job for a year, is leading a reform effort focused on cost-cutting and streamlining the company's operations.
“We are well on our way to creating a simpler structure,” Greco said, describing 2016 as “a very good year.”
Analysts have, however, voiced doubt about Zurich's ability to reform.
Thomas Seidl, an analyst at Bernstein in London, said in a note to clients that he remains “sceptical about Zurich's turnaround plans.”
“The track record of past cost-cutting exercises is not strong and the people involved have not changed that much,” Seidl said.
Zurich's shares were trading at 281.10 Swiss francs ($282.33), down about one percent, while the overall market was higher.
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