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. Last Updated: 07/27/2016

Zurich Posts $387M Loss, Dividend Cut

ZURICH, Switzerland -- Zurich Financial Services said Monday that insurance losses from Sept. 11 and weak financial markets contributed to a net loss of $387 million in 2001 and proposed slashing its 2001 dividend.

This was at the outside end of the net loss of $200 million to $400 million calculated under international accounting standards that it said it expected back in December. The company posted IAS net income of $2.328 billion in 2000, according to last year's report.

The company proposed cutting its dividend to 8 Swiss francs from 17.15 in 2000.

Zurich said "normalized" net income reached $348 million, while premium income rose 13 percent to $56 billion. The company reported normalized net income of $2.096 billion in 2000.

IAS net income and normalized results were affected by the Sept. 11 attacks, which generated insurance losses of $706 million, it said.

In addition, higher-than-expected claims, increased charges for specific exposures such as asbestos and lower results from discontinued operations adversley affected IAS net income and normalized results, it added.

Prevailing financial market conditions reduced life insurance and asset management results, leading to lower realized capital gains and causing a pretax asset impairment charge of $838 million to IAS net income.

The company did not give an outlook for 2002, and Zurich spokesman Max Gurtner declined to comment on the reasons behind the lower profit, which is normalized or smoothed on the assumption of stable investment earnings to strip out most of the financial market volatility.

The spokesman said details were due at a March 21 annual news conference, but could not confirm market talk that Zurich was getting bad news out of the way before announcing a successor to embattled chief executive Rolf Hueppi, who is under fire for his autocratic management style, the 2001 earnings plunge and strategic bungling.