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
Do adult children in Switzerland have to support their parents financially?
Usually, it is the parents’ responsibility to ensure their kids are well taken care of financially. But can Swiss authorities force the children to return the favour in times of need?
Updated: 5 May 2024 08:14 CEST
In most cases, once children are grown up and out of the house, they are (or at least should be) self-sufficient in terms of finances.
Parents too should breathe a sigh of relief that they are no longer obligated to pay for their children’s expenses, except perhaps for giving them some money here and there as a gift.
This is what happens in the best-case scenario.
But what if things don’t go according to this plan — for instance, if the parents find themselves in financial straits and can’t afford to pay their bills?
Family obligations
Generally speaking, the truly needy people who don’t have enough income to pay for their basic living expenses will receive financial help from the government, in the very least in the form of the health insurance and housing subsidy.
READ ALSO: Can I get financial help in Switzerland if I’m struggling to pay the bills?
However, before doling out public money, authorities will see whether relatives should be made to help the struggling individuals pay their bills.
(In this context, ‘relatives’ means only those in the direct line of descent: grandparents, parents, and children.)
They will do it by checking the tax status of these relatives — how much they earn and what other financial assets they have — to determine whether, and how much, they should be paying toward their parents’ expenses.
Obviously, you will be expected to pay up only if your own financial situation allows it; you will not be forced to part with your money if you have very little of it yourself.
‘Favourable financial circumstaces’
Based on a Federal Court ruling, if the adult child lives in ‘favourable financial circumstances’ they are required to help out their struggling parents.
The Court defined ‘favourable financial circumstances’ as income and assets allowing a comfortable life.
‘Comfortable life’, in turn, was defined by the Swiss Conference for Social Welfare (SKOS), as a taxable annual income of 120,000 francs for a single person, and 180,000 francs for married couples.
“If you have minors in your household, the limit is increased by 20,000 francs per child,” according to AXA insurance.
It goes on to say that you can deduct an exempt amount from your taxable assets.
“Your annual depletion of assets is deducted from the remaining amount. This means that if you are obligated to provide financial support, you are permitted to use part of your assets yourself each year; you don’t have to devote your entire assets to providing support.”
At between 18 and 30 years of age, this is 1/60th per year; from 31 to 40, 1/50th per year; 41 to 50, 1/40th per year; 51 to 60, 1/30th per year; and from the age of 61,1/20th per year.
Are there any exemptions to these rules?
Aside from not having sufficient funds, you could be exempted from paying if, say, your parents, or parent, have not lived up to their own financial obligations toward you.
In Switzerland, parents are required to provide financially for their children until the age of majority, and even beyond that if they are still studying or undergoing vocational training — typically, until the mid-20s.
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