Zurich Financial Services

In terms of ZFS’s reduced net result, it was in the ‘Other Business’ segment that the group was hardest hit, largely as a result of the segment’s exposure to financial market volatility in the shape of adverse equity market movements, widening credit spreads and the need to increase reserves in order to compensate for deterioration in the run-off of certain portfolios. A notable factor in the loss suffered by this particular operating segment was the deterioration in the valuation of hedge fund investments by Zurich Capital Markets

Despite facing some very tough challenges in all of its main operating areas (life/health and non-life insurance underwriting, investment, banking and asset management) in 2008, the Swiss-based Zurich Financial Services (ZFS) Group still managed to produce a net profit of US$3.1bn for the year. Although this figure is 46.0% down on the $5.9bn net profit achieved by the group in 2007 (and boosted by a net tax benefit of $452.0mn) it compares more than favourably with the results achieved over the same period by comparable European based insurance and financial services multi-national organisations such as Munich Re, Swiss Re, Axa, Generali and Allianz.