Zurich Insurance Group AG, Switzerland’s biggest insurer, reported third-quarter profit that missed analysts’ estimates as income from general insurance fell while taxes rose.

Net income fell to $928 million from $1.1 billion a year earlier, below the $1.04 billion average estimate of 11 analysts surveyed by Bloomberg. General insurance, its biggest unit, saw operating profit drop 4.3 percent in the quarter to $724 million, the Zurich-based insurer said in an e-mailed statement today.

On the other hand, Zurich Insurance said its combined ratio hit 96.6 for the first nine months of 2014, 1.2 percent better than the same period last year.

Chief Executive Officer Martin Senn has cut 670 jobs to help lower costs by $250 million annually, and started selling under-performing businesses, including a Russian general insurance company to Olma Group. Zurich shares declined as much as 3.1 percent in Swiss trading.

“The results missed forecasts on general insurance,” according to Daniel Bischof, a Zurich-based analyst with Baader Helvea who has a hold rating on the stock. “But Farmers is turning around and solvency” is strong.

Zurich said its solvency ratio, as determined under the Swiss Solvency Test, decreased by 2 percentage points to 215 percent, above the passing level of 100 percent. The Farmers unit in the U.S. reported a 0.6 percent increase in gross premiums written after six quarters of decline.

The shares fell 2.4 percent to 286.90 Swiss francs by 9:12 a.m. in Zurich trading. The stock has advanced 11 percent this year, valuing the company at 42.9 billion Swiss francs ($44.6 billion). That compares with a 3.9 percent increase in the 32- company Bloomberg Europe 500 Insurance Index.

‘Tougher’ Environment

The company reported a tax rate of 33.4 percent on operating profit in the third quarter as it expects a higher full-year rate.

Assicurazioni Generali SpA, Italy’s biggest insurer, today said third-quarter profit was almost unchanged as higher operating income from its life segment and property and casualty operations was offset by taxes.

At Zurich, large losses at the general insurance division were “slightly higher” than in the second quarter, mainly due to an increase in big individual claims at the company’s Global Corporate unit for business customers, according to comments from Chief Financial Officer George Quinn. The group reported a $90 million loss from Hurricane Odile in Mexico.

“While we continue to make progress, we recognize the environment is getting tougher, underlining the need for us to remain focused on our strategic approach,” Quinn said in the statement. “We continue to optimize our portfolio, taking action on underpriced risks, and to prioritize investment in the markets and customer segments where we see the most attractive returns.”

In December, Zurich reduced its target for return on equity, a measure of profitability, to between 12 percent and 14 percent by 2016 from 16 percent.