Zurich Insurance tops profit forecast, catastrophe losses weigh on shares
H1 operating profit $4 bln vs forecast $3.9 bln
Property/casualty operating profit up 3%, life up 13%
Natural catastrophe losses higher than year ago
Organic growth is focus, could look at acquisitions-CFO
Recasts paragraph 1, adds detail, CFO comment, shares
By Carolyn Cohn and Eva Orsolya Papp
LONDON, Aug 8 (Reuters) -Zurich Insurance ZURN.S posted a record first-half operating profit on Thursday and said it was on track to beat its 2025 targets, but concerns about natural catastrophe losses sent its shares lower.
Insurers have benefited from several years of rising premiums as a result of wars, the COVID-19 pandemic and natural catastrophes, but losses from the catastrophes - such as floods and wildfires - are a worry for investors.
"Natural catastrophes are risks that insurance companies can cover, the question is the cost," Chief Executive Mario Greco told a media call.
"They are more expensive than they used to be because the frequency of these events is totally different than it was in the past - much higher and also touching geographies that never had these events before."
Zurich's Farmers business has pared back some of its exposure to natural catastrophes in the United States, Greco told a later media call.
Zurich posted a bigger than expected 7% rise in first-half operating profit to a record $4 billion. Analysts had on average expected operating profit of $3.9 billion, according to company-compiled poll.
Property and casualty (P&C) operating profit for Europe's fifth-largest insurer came in slightly below forecast, however, rising 3% to $2.2 billion, against expectations of $2.3 billion.
Natural catastrophe losses added 2.4% to the P&C combined ratio, compared to 1.8% in the first half of 2023. Combined ratio is a key measure of underwriting profit, where a lower number indicates greater profitability.
Zurich's shares were down 3.1% at 0813 GMT, versus a 0.5% fall in European insurance stocks .SXIP.
Operating profit in Zurich's life business rose 13% to a record $1 billion, in line with forecast, while operating profit at Farmers rose 12% to a record $1.1 billion, also in line with estimates.
Zurich said in a slide presentation that it was on track to exceed all its 2023-2025 financial targets.
Finance chief Claudia Cordioli told a media call that, following Zurich's purchase of AIG's AIG.N travel business in June, the company was focusing on organic growth, but that it would "continue to look at the market" for potential acquisitions.
Additional reporting by Paul Arnold in Zurich, Editing by Eileen Soreng and Mark Potter
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