Zurich Financial Services estimates terror attacks payouts could reach $900 million

Tuesday, October 9th 2001, 12:00 am
By: News On 6

ZURICH, Switzerland (AP) _ European financial products giant Zurich Financial Services said Monday its losses from the Sept. 11 terror attacks on the United States could reach $900 million _ more than double its earlier estimate.

The company said in a statement that it estimates it will have to pay out $700 million to $900 million _ the largest insurance payout in its history. The loss represents around 2 percent of the company's $55 billion annual premium total, it said.

Zurich Financial said previously that it expected losses of around $400 million.

In trading on the Zurich exchange, shares in Zurich Financial were down 12 percent.

In the wake of the attacks, the world's biggest reinsurance companies said also that the strikes would produce the largest claims they have ever faced. Munich Re and Swiss Re said they expected jointly to pay out more than $3 billion.

Zurich Financial said its premiums have ``dramatically increased'' since the attacks.

Company spokeswoman Iris Roth said the effect on Zurich Financial's accounts of the attacks would be hard to gauge. But she said that based on experience up to 85 percent of the pretax losses could ultimately hit company profits.

This would mean that the terrorist strikes could chip away $560 million to $765 million of this year's net profit.

Before the attacks, the company said it expected to earn $1.8 billion to $2 billion this year, down from $2.1 billion in 2000.

``We can't maintain that target now,'' Roth said.