NU Online News Service, Nov. 04, 3:36 p.m. EDT
Zurich Financial Services Group said it earned $751 million during the third quarter as results were affected by a legal settlement involving its Farmers Group subsidiary.
Zurich took a charge of $295 million related to a proposed settlement in Fogel vs. Farmers Group Inc., a nationwide class action suit pending in Los Angeles Superior Court that alleges the insurance group overcharged for fees paid by the Farmers Exchanges.
Zurich's net income of $2.4 billion for the first nine months is down 18 percent compared with last year at this time, the company said.
Profit in Zurich's general insurance segment is down 22 percent as of Sept. 30 due to weather-related losses and the earthquake in Chile, as well as declines in investment returns.
Rate increases and underwriting action during the year thus far helped the company's loss ratio in this segment, but the weather events and lower earned premiums resulted in a combined ratio of 97.8 compared to 96.9 at this time last year.
The Farmers segment turned in a $1.3 billion profit for the first nine months compared to about $1.13 in 2009 at Sept. 30.
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