Zurich Insurance Group (ZURVY), formerly known as Zurich Financial Services Group, Monday said it anticipates aggregate claims net of reinsurance of about $700 million, related to Hurricane Sandy in the U.S. on October 29. The charges are pre-tax and will be recorded in the fourth quarter of this year.
The Zurich, Switzerland-based multi-line insurance provider noted that its estimated amount includes $40 million related to Farmers Re in connection with reinsurance cover provided to Farmers Exchanges. Farmers Exchanges are managed by Farmers Group, Inc., but not owned by it. Farmers Group is a wholly-owned unit of Zurich Insurance.
Zurich Insurance also estimates $58 million in reinstatement premiums due on reinsurance covers.
Martin Senn, chief executive officer of the company said, "This storm has shown us once again how powerful natural forces can be and what risks they pose...Zurich's strong balance sheet, healthy cash flows and risk expertise enable us to be there for our customers when they need us and to deliver on our promise."
Zurich stated that it already made its first claims payments related to the storm on November 5. The company has also completed inspecting all the locations with major storm losses by mid-November.
In mid-November, Zurich Insurance had reported a 62 percent decline in profit for the third quarter, following a hefty adjustment in the German General Insurance business. The Swiss insurance holding company had said in October that it would write-off about $550 million after a review of its General Insurance business in Germany.
Last month end, Zurich Insurance had said its targets for 2013 remained unchanged, and was progressing towards achieving them. The company aims to achieve a business operating profit after tax return on equity of 16 percent over the long term, but said, "These are very ambitious targets given that the environment in which we are operating has become even more challenging in 2012."
The company is scheduled to release its annual results on February 14, 2013.
In Zurich, the shares closed Friday's regular trading at 239.60 Swiss francs, up 0.29 percent.
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