Zurich Financial Services (ZFS), the Swiss insurance company which faced criticism for an equity-linked bond in 2001, has blamed part of the recent fall in its share price on an innovative Sfr600 (€409m) exchangeable "Miles" issue in January.

Miles stands for market index-linked securities. Earlier this year ZFS became the first company to use the instrument, designed by UBS Warburg, to sell its own shares. The bond can be exchanged into ZFS shares at any time but the number of shares investors receive is dependent on the performance of the ZFS share price relative to the SMI index, the benchmark for the Swiss market. The further ZFS shares underperform relative to the index the more shares the company has to issue, up to a maximum limit of three million shares.