Zurich Insurance profit rises 6% following fewer catastrophes

Zurich Insurance Group, said second-quarter profit rose 6 per cent as it took fewer losses from natural catastrophes.

Net income rose to $837 million from $789 million a year earlier, the Zurich-based insurer said in a statement today.

"We have seen clear progress on the execution of our strategy and delivery against our targets," chief executive officer Martin Senn said in the statement. "While still early in our three year plan, we are on track for our 2014 to 2016 targets."

Zurich, which said in December it seeks a return on equity, a measure of profitability, of 12 per cent to 14 per cent through 2016, revising the target from 16 per cent, plans to save $250 million annually by cutting as many as 800 jobs and announcing restructuring charges of $400 million to $600 million.

The insurer started reducing costs last year, eliminating 53 jobs across its general insurance operations in the Middle East, bringing total job losses to 670 this year.

In general insurance, it’s biggest unit, operating profit rose 44 per cent to $807 million, as there were no major catastrophe and weather-related losses.

The combined ratio, a profitability measure withing non-life insurance, improved to 95.7 per cent from 99.1 per cent.

Operating profit in the life unit declined 11 per cent to $315 million. The shares have risen 0.8 per cent this year, valuing the company at 38.9 billion Swiss francs ($42.9 billion).

Bloomberg