Job cuts boost insurer Zurich's bottom line

AFP/The Local
AFP/The Local - [email protected] • 7 Aug, 2014 Updated Thu 7 Aug 2014 16:03 CEST
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Swiss group Zurich Insurance said on Thursday its net profit had jumped 14 percent for the first half of the year compared to the same period in 2013, boosted by restructuring involving 670 job cuts.

The group, which in March announced a restructuring programme, posted a net profit of $2.1 billion (1.6 billion euros) for the January-June period, meeting analyst expectations.
   
The company's operating profit meanwhile rose to $2.6 billion during the first half of the year, a 15-percent increase from the outcome at the same time last year.
   
The insurer also said it had raked in $37.57 billion in new business between January and June, up four percent from a year ago.
   
Following the news, Zurich saw its share price surge 3.5 percent in midday trading to 269.70 francs a piece, as the Swiss stock exchange's main SMI index inched up 0.48 percent.
   
The group, meanwhile, said it had made great strides in a restructuring programme announced in March.
   
"We have seen clear progress on the execution of our strategy and delivery against our targets," company chief Martin Senn said in the earnings statement.
   
"While still early in our three year plan, we are on track for our 2014 to 2016 targets," he added.
   
Zurich, which counts around 55,000 employees worldwide said its restructuring would affect fewer jobs than the 800 positions previously expected and that most of the 670 job cuts needed had already been carried out.

In Switzerland, 150 positions are affected, most of them at the company's Zurich headquarters.
   
"The process is designed to reduce complexity and cost while enhancing agility," the company said.
   
During the second quarter of the year, Zurich saw its net profit rise six percent to $837 million, while its operating profit swelled 32 percent to $1.2 billion.
   
The group's combined ratio -- a measure of how effective insurers are at balancing administrative costs and payouts to clients against premiums paid in -- during the second quarter improved by 3.4 percentage points from the April-June period in 2013 to 95.7 percent.

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