Zurich Insurance profit falls

ZURICH: Zurich Insurance Group AG, Switzerland's biggest insurer, said
first-quarter profit dropped 7 percent after investment returns
declined.

Net income fell to $1.06 billion from $1.14 billion in
the year-earlier period, the Zurich-based insurer said today in a
statement. This missed the $1.14 billion average estimate of 10
analysts surveyed by Bloomberg.

Zurich Insurance is looking to
bolster earnings by expanding in emerging markets and bought operations
in Malaysia and Latin America in 2011. While the insurance industry is
struggling in the face of low interest rates, there were no major
claims from natural disasters in the quarter.

"We continue to
operate in a challenging economic environment with persisting low
interest rates against which we have posted strong, high quality
underlying profits," Chief Executive Officer Martin Senn said in the
statement. "We remain on track to deliver our 2013 targets."

Total
investment returns declined to 0.4 percent during the quarter from 2
percent in the year-earlier period amid "persistently low interest
rates," the company said. The net investment result fell 5 percent to
$1.69 billion.

Allianz SE, Europe's largest insurer, said
yesterday first- quarter profit rose 24 percent to 1.71 billion euros
($2.2 billion) as higher prices pushed revenue to a record.

Zurich
Insurance operating profit from general insurance, from which the
company generates most of its sales, dropped 6 percent to $807 million
after tripling in the year-earlier quarter.

The unit was
reorganized last year and has toughened controls in emerging markets to
avert a repeat of a $680 million write-off in Germany last year.

Operating
profit from its unit selling life and pension products rose 6 percent
to $308 million with the acquisition of a Latin American insurance
business from Banco Santander SA in 2011.

Zurich said its
solvency ratio under Swiss rules introduced in 2011 rose to 185 percent
on Jan. 1, from 178 percent six months earlier. -- BLOOMBERG