The report came a week after Zurich revealed its interest in buying British rival, Royal & Sun Alliance, news which sent RSA shares surging.
Zurich's business operating profits of $2.2 billion marked a 15 percent fall compared to the first half of 2014.
That figure was well below the expectations of analysts polled by the AWP financial news agency who had anticipated an operating profit of $2.5 billion.
The firm's shares were trading down 3.82 percent on Thursday at 287 Swiss francs a piece, as the Swiss stock exchange's main SMI index was down 0.2 percent.
“In terms of our key targets, we remain in a very strong position,” chief executive Martin Senn said in a statement.
He noted the strong performance in the firm's Global Life and Farmers divisions, while noting that the General Insurance unit “was adversely affected by large losses”.
Business operating profits in General Insurance, the largest unit at Zurich, fell by 31 percent compared to the first half of last year to $1.2 billion.
Significant losses in Britain and among the corporate division in North America were largely responsible for the profits fall, as were higher expenses and “high levels of catastrophe and weather related losses,” the company said.
The Swiss insurance giant's July 28th confirmation that it was evaluating a possible offer for RSA earned praise from some analysts, who said such a takeover would offer Zurich a stronger foothold in northern Europe and Latin America.
On Thursday Senn said an RSA takeover “could bring significant benefits to us and to our investors in terms of the complementary fit.”
Zurich Insurance indicated to investors in May that it had a capital surplus of some $3.0 billion that it planned to deploy, but on Thursday raised that target to $3.5 billion.
Media reports in Britain last week said Zurich had valued RSA at $8.7 billion.
“Any capital deployment would need to meet the same hurdles that we apply to any other investment,” Senn said.
BUSINESS
Large losses dent profits for Zurich Insurance
Swiss firm Zurich Insurance reported first half net profits of $2.1 billion (€1.9 billion) on Thursday, down three percent over the same period last year, following large losses in its general insurance business.
For members
MONEY
Is it better for consumers in Switzerland if the Swiss franc is strong or weak?
Although Switzerland’s currency has weakened slightly against the euro in recent weeks, it remains strong. Is it good or bad news for consumers?
Generally speaking, when a country’s currency is strong — as the franc is right now against both the euro and dollar — consumers benefit on several fronts.
The main reason is that they will get more bang out of their francs, especially in these situations:
Imported goods
Since the exchange rates between the Swiss and foreign currencies are in franc’s favour, any merchandise that comes from abroad will, in principle, be cheaper.
If you go shopping in a supermarket and find, for instance, that the price of Swiss eggs hasn’t budged (and certainly not downward), you will have more luck with eggs imported from Germany or France.
However, while you may see some savings when purchasing foreign goods, this may not be a huge amount.
The reason, according to Moneyland consumer platform, is that “Swiss importers are not obligated to pass on extra profits earned on exchange rates to customers – and many of them don’t reduce prices at all.”
Cross-border ‘shopping tourism’
Most products are cheaper — and sometimes by much — in other countries.
Even though inflation rates are higher abroad than they are in Switzerland, as is the Value-Added Tax, the franc’s power means it is still worth your while to buy your groceries in France, Italy, Germany, and other eurozone countries as well.
That, however, doesn’t mean that all products are cheaper abroad – it all depends on the specific goods and services in question.
For example, in general, electronics have lower price tags in Switzerland than in the EU countries.
READ ALSO: The one product that is cheaper in Switzerland
Foreign vacations
With the franc stronger than the euro and US dollar, you can definitely benefit from travel abroad.
Whether just for a long weekend or full-scale holidays, you will be able to get more out of your money in many foreign countries, at least in terms of accommodations and food, than you would for the same amount of money in Switzerland.
Keep in mind, however, that the strong franc will not compensate for the cost of getting there and back, as the prices for airplane tickets, train travel, and petrol remain high.
All that is good, but is there a flipside as well?
The biggest ‘negative’ of the strong franc is that export-based companies suffer, because the goods they sell are too expensive abroad.
You may argue that this affects economy as a whole rather than individual consumers, and you’d be right — but only up to a point.
That’s because whatever happens in the economy at large will eventually trickle down to, and affect, the population, along with consumer confidence and spending habits.
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