(Bloomberg) -- Zurich Insurance Group AG, Switzerland’s biggest insurer, reported a fourth-quarter loss after damage claims ranging from the Tianjin disaster in China to storms in the U.K. and Ireland.
The net loss was $424 million compared with a profit of $860 million a year earlier, the Zurich-based company said in a statement on Thursday. That compares with an expected loss of $261 million, the average of seven analyst estimates compiled by Bloomberg. The proposed dividend is unchanged at 17 Swiss francs ($17.49).
Zurich is reshaping general insurance and revamping its top management after a year that saw the company abandon a high- profile takeover bid for RSA Insurance Group Plc following unexpectedly high claims. Chief Executive Officer Martin Senn stepped down in December and Assicurazioni Generali SpA head Mario Greco is set to take over in March.
The company said it has no plans to return additional capital to investors at this time. Zurich had about $3 billion in excess cash following the dropped RSA bid. It spent about $1.05 billion of that acquiring a U.S. crop insurance business in December.
“Our key priorities in 2016 will be turning around our general insurance business and continuing actions to position the group for 2017 and beyond, including enhancing efficiency and sharpening the group’s retail footprint,” Chairman and acting CEO Tom de Swaan said in the statement. The company said it plans to cut costs by more than $300 million this year.
The combined ratio in general insurance was 103.6%, according to the statement. A measure of more than 100 means the unit is paying out more in claims and costs than it’s collecting in premiums. Zurich also said it’s unlikely to reach its return-on-equity target for this year of 125 to 145.
The company confirmed a forecast operating loss in general insurance, which amounted to $120 million.
Zurich said it has taken first steps to improve the profitability of general insurance, including job cuts and an exit from part of the U.S. transportation business. It is also considering adding more reinsurance coverage for the unit and may exit a number of under-performing portfolios.
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