(Bloomberg) — Zurich Insurance Group AG, Switzerland's biggestinsurer, will cut costs by more than planned as it seeks to reversea drop in earnings.

Chief Executive Officer Martin Senn said he will make additionalannual savings of at least $1 billion by the end of 2018, including$300 million by the end of next year.

Zurich will save about $600 million from shared services, humanresources, finance and communications, he said in a phone interviewfrom Switzerland's financial capital on Thursday. It is too earlyto comment on possible staff reductions, he said.

Europe's insurance executives are seeking ways to bolsterearnings as they grapple with a slump in interest rates on the debtthey have purchased, spurred by the European Central Bank'sbond-buying program. Zurich has cut about 670 jobs and startedselling underperforming businesses to help lower costs.

Senn said the company will reduce costs at the general insuranceunit, which sells property and casualty policies, by about $200million by the end of 2016. Expenses as a proportion of premiumincome at the division increased to 30.5% last year from 29.7% in2013.

Zurich reported on May 7 that first-quarter profit fell 4% to$1.22 billion, the third-straight quarterly decline. Profit fromgeneral insurance, a business headed by Mike Kerner, slid 20% to$706 million.

Costs Rose

Zurich's costs, excluding its Farmers unit in the U.S. andrestructuring charges, rose to $10.1 billion last year from $9.5billion in 2013, partly as a result of “complex middle-officeprocesses and systems” and too many employees in high-costlocations. The expenses included $2.9 billion for supportfunctions, which rose from $2.7 billion, and for informationtechnology, which climbed $200 million to $2 billion, according toa company presentation.

Senn says he will cut costs to help reach a target for return onequity, a key measure of profitability, of 12% to 14% by the end of2016. It fell to 11.1% in 2014 from 11.6% the previous year.

To reach the cost savings, Zurich will incur about $400 millionto $600 million in accounting and restructuring charges, with themajority included in this year's results.

The company reiterated a plan to redeploy $3 billion of excesscapital by the end of 2016. The cash will be either spent onmergers and acquisitions or a return of capital to shareholders, itsaid.

Chief Financial Officer George Quinn told analysts earlier thismonth that Zurich had “the shorthand of $3 billion” in capitalavailable.

The shares rose 0.7% to 305.80 Swiss francs at 12:33 p.m. inZurich, valuing the company at 46 billion francs ($49 billion).They declined 1.9% francs this year compared with a 15% gain forthe Bloomberg Europe 500 Insurance Index.

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.