Zurich Financial, the Anglo Swiss financial services consortium, posted weaker than expected results from first half operations. Analysts blamed the disappointing performance on reduced capital gains due to weaker equity markets, and changes in accounting methods for capital gains.
While profits of the two components, Allied Zurich (UK) and Zurich Allied (Switzerland), excluding capital gains, were up slightly from 1999’s first half to $1.1 billion, they failed to reach analysts’ estimates of $1.34 billion for the period.
Changes in accounting methods for capital gains, to reduce the impact of volatility, does explain some of the disappointment in the figures, but some of the insurance results suffered as well. Farmers Insurance, the group’s U.S. p/c company registered a marked decline in profits for the period from $310 million to $276 million.
Zurich Financial plans to combine the two companies and streamline operations by the end of the year, and still hopes to attain its overall profit forecasts for 2000.
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