The ratings on the various operating entities of Switzerland-based insurance group Zurich Financial Services (ZFS), including the members of the Zurich U.S. Intercompany Pool, reflect Standard&Poor's Ratings Services' view of ZFS' very strong underlying operating performance, strong enterprise risk-management (ERM) program, and the group's very strong competitive position. These strengths are partly offset by our opinion that ZFS' capitalization, although improved, remains a relative rating weakness. Moreover, economic conditions are still difficult and could impede ZFS' progress in implementing further rate increases and limit opportunities for further business and earnings growth. The group's average underlying operating performance in 2005-2009 remained very strong and broadly in line with our expectations, despite unfavorable financial markets and operating conditions. The business
