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It appears that chief executive officer Mario Greco’s overhaul of Zurich Insurance is paying off, with the company reporting a remarkable swing into profit during the fourth quarter of 2016.
The largest insurance firm in Switzerland, and international giant, enjoyed net income for the period of $685 million – a significant upswing from the $424 million loss during the same period last year. Over the full year, its net income was up 74% to reach $3.2 billion.
The upswing comes on the back of Greco implementing a number of cost cutting procedures, including offloading some businesses and reducing staff numbers.
“We are very pleased with our results for 2016,” he said. “Both global life and farmers continued to grow well while general insurance benefited from a stronger underlying performance across all regions.”
Breaking down the results, general insurance for the firm reported fourth quarter operating profit of $611 million, comparing to a loss of $120 million during the same period one year earlier. According to a statement, the unit has “not yet achieved a satisfactory level of profitability,” and the company remains focused on improving its portfolio in the coming year.
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The cost cutting is likely to continue this year with the combined ratio of its general insurance unit at 98.5% - anything above 100 would indicate it is paying more in costs and claims than it collects in premiums.
Elsewhere, operating profit at the global life unit climbed by 4.3% to reach $312 million, largely due to higher profits in the Asia Pacific region.
Focusing specifically on the UK, business operating profit reached £147 million compared to a loss of £62 million for the same period last year; and the combined ratio improved to 97.1%, a significant jump from last year’s 109.5%. Meanwhile for Zurich UK Life, business operating profit stood at £119 million, up 5% compared to the prior year.
“Both general Insurance and life delivered solid results for 2016. This means we have started 2017 with strong momentum and the financial strength to match our breadth of proposition,” said UK CEO Tulsi Naidu.
“We will keep our focus on serving the needs of our customers and distributors as we continue developing our business in a profitable and sustainable way.”
