Zurich Insurance is aiming to achieve cost savings targeted for the end of next year without any disposals, its chief executive said on Thursday as it reported a forecast-beating 19 percent rise in first-half results. Insurers across the globe have been restructuring their businesses to cope with competitive and regulatory pressures and last year's record losses from natural disasters.
Zurich, Europe's fifth-largest insurer, has achieved $900 million of its planned cost savings of $1.5 billion by end-2019, it said on Thursday. "Disposals are not really considered," Greco told a media call, adding that the firm was looking to make savings from its end-2016 cost base.
The bulk of the remaining savings targets will be made through reductions in IT expenses, Greco added. Zurich has been expanding in Latin America, where it bought Australian insurer QBE's Latam business for $409 million in February. Zurich's first-half net profit rose to $1.79 billion, helped by strong performance in its property and casualty and life divisions and beating the average analyst estimate of $1.72 billion in a Reuters poll.
Zurich's combined ratio, a measure of underwriting profitability, strengthened to 97.5 percent against the poll average of 97.7 percent. The insurer said it was on track to deliver its 2017-2019 targets. Barclays analysts said in a note that the market was "already giving credit for a full delivery" on the targets, reiterating their neutral weighting on the stock.
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