Switzerland's largest insurer said in a statement net profit amounted to $3.2 billion (3.0 billion euros) last year, a huge increase over the figure for 2015 when the company was hit by heavy costs linked to the industrial disaster in Tianjin, China.
Chief executive Mario Greco, who has been on the job for a year, is leading a reform effort focused on cost-cutting and streamlining the company's operations.
"We are well on our way to creating a simpler structure," Greco said, describing 2016 as "a very good year."
Analysts have, however, voiced doubt about Zurich's ability to reform.
Thomas Seidl, an analyst at Bernstein in London, said in a note to clients that he remains "sceptical about Zurich's turnaround plans."
"The track record of past cost-cutting exercises is not strong and the people involved have not changed that much," Seidl said.
Zurich's shares were trading at 281.10 Swiss francs ($282.33), down about one percent, while the overall market was higher.