NU Online News Service, Dec. 03, 3:43 p.m. EST
Zurich Financial Services Group said it is looking to reduce expenses by $500 million in an effort to improve profitability.
Zurich's net income of $2.4 billion for the first nine months was down 18 percent compared with last year at this time.
Martin Senn, chief executive officer of the insurance provider, told investors Zurich's is "well-positioned to outperform in a challenging environment."
"We believe that our agility, superior financial strength and strategic focus allow us to meet the industry challenges of low investment returns and new regulatory capital regimes," Mr. Senn said.
The company's goal is to have a return on equity of 16 percent "over the medium term."
Of the $500 million in expense reductions by 2013, $350 million is to come from the group's general insurance segment. The combined ratio in this segment looks to improve by 3-4 points by 2013, according to the company, while focusing direct efforts Germany, Italy and Switzerland.
Zurich also will accelerate the release of $1.5 billion in capital from non-core business by 2015.
The group's Farmers subsidiary aims to maintain its growth despite tough economic conditions. According to CEO Bob Woudstra, Farmers grew market share 1.1 percent in the last three years, outpacing the top 12 U.S. personal lines insurers.
Based on the improved underwriting and operating performance of the U.S. subsidiaries of Zurich Insurance Company, rating agency A.M. Best recently upgraded the insurer's financial strength rating to "A-plus" from "A," with a stable outlook, to reflect Zurich's strong capitalization and enterprise risk management.
The Zurich Insurance Group is the third-largest writer of homeowners multiperil and the fifth-largest writer of both private passenger automobile and commercial multiperil insurance in the U.S., according to Highline Data, a part of Summit Business Media, which also owns National Underwriter.
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