Net profit at insurer Zurich Financial Services surged 33% in the first half of the year, beating market expectations despite heavy flooding in the U.K., the company reported Thursday.
Zurich Financial, which said it was not exposed to the U.S. subprime crisis and was on the lookout for acquisitions, reported earnings of $2.68 billion for the first six months of 2007.
Operating profit rose by 12% to $3.27 billion over the same period, while return on equity rose by 1.7 percentage points to 22.3%.
"We think we’re on the right track to continue to deliver above-market operating earnings," Jim Schiro, Zurich Financial Services CEO, told "Squawk Box Europe."
He said wet weather across Western Europe and especially the U.K., which shed 2% off combined ratio -- which measures costs and claims as percentage of premium income -- was not a major reason for concern.
"We don’t have a target on combined ratio," he said.
Schiro added that Global Life, where operating profit jumped by 25% to $721 million, Farmers Management Services, where operating profit rose 7% to $672 million, and the group’s international business were the areas where the company was “growing very well.”
Zurich Financial was focused on expanding, either organically or by buying other companies, but not at the expense of profitability, he said.
Asked about market speculation that they are targeting British insurer Friends Provident, Schiro said the company is " focused on growing inorganically as well, but we don’t comment on specific rumors. We look at a lot of opportunities but they have to beat our hurdle rates."
He added that Zurich Financial was not affected by the crisis in the U.S. subprime sector and that the current turmoil will ease.
"We’re looking at a crisis and it's going to have to play out, but ultimately the market will have to find its natural water level," Schiro said.
Zurich Financial shares fell more than 2% in morning trading on Thursday, as all major European indexes opened lower on world credit markets woes.