Zurich Insurance Group’s net profit for the third quarter has met the insurer’s worst expectations, falling 79% to $US256 million ($358 million).

In the nine months to September 30 the deterioration was not as marked, with net profit down 27% to $US2.27 billion ($3.18 billion).

CEO Martin Senn says the poor result reflects underperformance in the general insurance business, as flagged in the group’s revised earnings forecast in September.

As a result, changes are under way at Zurich.

“A comprehensive review of the business has led to an action plan to improve performance, reduce volatility and deliver a rapid recovery in profitability,” Mr Senn said.

“This includes the reshaping of the management team, re-underwriting and exit of underperforming portfolios and additional measures to improve efficiency.”

As reported in September, the result is due to several factors, including exposure to the massive chemical storage facility explosions in Tianjin, China, in August, plus adverse claims experience and “negative prior-year development in certain portfolios”.

The combined operating ratio for the nine months deteriorated to 101.9% from 96%.

“The review of the business is on track, with actions already being implemented to address underlying performance issues,” Mr Senn said.

Zurich is exploring options to reduce earnings volatility through the use of reinsurance and other measures.

This and its other initiatives are designed to reinforce underwriting discipline, reduce large losses and improve efficiency, Zurich says.