Hurricanes Gustav and Ike hit earnings at Zurich Financial Services, the Swiss insurer said this morning.

The group, which employs Tony Blair as an advisor, saw net profit fall 32 per cent to $2.8 billion (£1.9 billion) for the first nine months of the year. It suffered net capital losses of $1.1 billion and catastrophe losses of $595 million.

The group also suspended a SwF 2.2 billion (£1.2 billion) share buyback due to market volatility.

James Schiro, chief executive, said: “In the face of such turbulent times, I am particularly pleased in our ability to deliver continued profits and maintain our high solvency ratio”.

He added: “We see an improving general insurance environment and continued opportunities across all our businesses, leaving us confident in our ability to generate consistent shareholder value”.

It said its solvency position was 159 per cent at the end of October and that it is well positioned to weather the current financial storm.

Dieter Wemmer, its chief financial officer, said the company would consider returning to the share buyback. He said: “You have to balance at this time between prudence and opportunity even if prices are low, and I think prudence comes first as we don’t know how long this financial crisis will last.”

Zurich Financial has bought back slightly more than SwF 1.25 billion under the programme so far.

Zurich and other insurers suffered a sell-off yesterday after Swiss Life issued a profit-warning and also halted its share buyback programme.

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