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Adverse factors reduce Zurich 2001 results

Zurich, December 21, 2001. - Zurich Financial Services announced today that it expects to report an IAS net loss of USD 200 million to USD 400 million for 2001. A number of factors have impacted this result, such as the consequences of September 11th attacks, asset impairment charges, lower investment income, higher than expected non-life insurance claims and the deterioration in the results of discontinued operations. The 2001 normalized net income is now expected to be between USD 700 million and USD 900 million. Actual 2001 results will be released on March 21, 2002.

Barring unforeseeable circumstances, the Group expects 2002 earnings to return to the medium term 10% to 15 % average normalized earnings growth over the pre September 11th estimate of USD 1.8 to USD 2 billion.

The 2001 earnings estimate includes direct insurance losses from the September attacks of USD 760 million after tax (USD 900 million pre-tax). In addition, September 11th had the indirect impact of lowering life insurance results, asset management fees and interest income by USD 200 to USD 250 million after tax.

Financial markets have been depressed since the beginning of the year and also have adversely impacted the Group's IAS net income. Compared with the year 2000, realized capital gains are expected to be approximately USD 2.3 billion lower. This amount includes USD 0.9 billion of asset impairment charges.1 The Group's presentation of normalized net income is not affected by either this provision for asset impairment or by the significantly lower realized capital gains.

Outlook for 2002

2001 has been a transition year during which the group has made progress in refocusing its businesses, reducing its financial leverage and making further improvements in its organizational and operating efficiency. Barring unforeseeable circumstances, the Group expects 2002 earnings to return to the medium-term 10% to 15 % average normalized earnings growth over our estimate of USD 1.8 to USD 2 billion, made prior to September 11th.

The Zurich Financial Services Group (www.zurich.com) is a global leader of integrated financial services providing its customers solutions in the area of financial protection (non-life insurance and structured solutions) and asset gathering (life insurance and asset management). The Group focuses its activities on key markets, i.e. North America, UK, Switzerland, Europe and selected other markets where it has or can reach a competitive position. Founded in 1872, Zurich is headquartered in Zurich, Switzerland. It has offices in more than 60 countries employing approximately 70,000 people.

For further information please contact:
Zurich Financial Services, Media and Public Relation
8022 Zurich, Switzerland
Phone +41 (0)1 625 21 00, Fax +41 (0)1 625 26 41
http://www.zurich.com

1 Equities and fixed income securities with market value lower than 80% of their carrying value for more than 6 months have been reviewed for impairment and respective write downs have been made.