Bloomberg News

Zurich Says Tornado, Hail Storm Claims Total $295 Million

June 20, 2011

(Updates with analyst comment in fourth paragraph.)

June 20 (Bloomberg) -- Zurich Financial Services AG, Switzerland’s biggest insurer, estimates claims of about $295 million from the tornadoes and hail storms that hit the U.S. in April and May.

Claims of $200 million at its Zurich North America business and $95 million at its Farmers Re unit are net of reinsurance and before tax, the Zurich-based insurer said in an e-mailed statement. The losses will be recorded in first-half results to be released on Aug. 11.

An above-average number of tornadoes and hail storms, mainly in the Midwest and the Southeast regions of the U.S., boosted claims for insurers, including Allstate Corp., which reported losses tied to disasters of $2 billion in the first two months of the quarter. Inc. AIR Worldwide, a modeling firm, projected insured losses of about $7.7 billion to $12.5 billion industrywide from two weeks of storms in April and May.

The “loss confirms Zurich’s solid reinsurance protection and in our view is in line with market expectations,” said Stefan Schuermann, a Zurich-based analyst with Vontobel Holding AG who has a “buy” recommendation on the stock. The claims will cut full-year pretax profit by about 5 percent, he said.

Zurich fell 0.8 percent to 213.6 Swiss francs at 9.59 a.m. in local time, valuing the company at 31.4 billion francs ($37.1 billion).

The Farmers Exchanges, which are managed by a unit of Zurich, estimate losses of $400 million from the events, the insurer said.

--Editors: Dylan Griffiths, Christiane Lenzner.

To contact the reporter on this story: Carolyn Bandel in Zurich at cbandel@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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