Profits boost makes 2016 ‘a very good year’ for Swiss insurer

Zurich Insurance said on Thursday its profits rose 74 percent in 2016, thanks to fewer claims and progress in its restructuring drive.

Profits boost makes 2016 'a very good year' for Swiss insurer
File photo: Fabrice Coffrini/AFP
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.

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Swiss pharma Novartis sees drop in profits

Swiss drugmaker Novartis on Tuesday posted a drop in first half profits amid fierce competition for generic medicines and pricing pressures but said it was set to reach annual targets.

Swiss pharma Novartis sees drop in profits
File photo: Fabrice Coffrini/AFP
January-June net core income dropped five percent to $3.6 billion (3.1 billion euros), as overall first half sales dipped one percent to $23.7 billion, despite a six percent rise in volume, the group said.
Those volumes were buoyed by two medicines deemed to have strong potential– heart drug Entresto and Cosentyx, a treatment for psoriasis.
Stiff competition for generic medicine — not least copycat drugs for its blockbuster cancer drug Gleevec — has eaten away some three percent of current profit margins, while price pressures have accounted for another two percent.
For the outlook for the year as a whole Novartis reconfirmed its objectives in saying it expected global sales this year to hit similar levels to 2016.
In January, the group announced total sales of $48.5 billion for 2016.