With the over-reaching goal to improve its combined ratio by 3 to 4 percentage points by 2013 relative to its global competitors, Zurich Financial Services AG, confirmed plans to accelerate its exit from several centrally managed businesses in an effort to free up approximately $600 million in capital. More than two-thirds of the savings will come from its non-life business, confirmed the company.

Last year, general insurance contributed 62% of the insurer’s profit. As recently as Nov. 30, 2010, Zurich’s North American operations in Schaumburg, Ill., announced additional commercial lines’ property/casualty products, including its Property Portfolio Protection (P3) for the construction industry.

During a conference call held Friday, CEO Martin Senn said Zurich does not expect “mass layoffs” as part of the cost cuts.

Analysts report that the combined ratio improvement against peers by 2013 will be a challenge, but with $350 million of targeted costs cuts at the general insurance unit, the company may make its goal.

Zurich confirmed that 77% of its general insurance business's income currently comes from investments, while 23% comes from underwriting. If those proportions are maintained given low interest rates, it faces a $550 million shortfall in investment income between 2009 and 2013.

According to the Wall Street Journal, Mario Greco, Zurich's head of its general insurance unit, said: "We need to have a much higher contribution from underwriting, otherwise the business operating profit will fall and not increase as we want it to."

Greco hopes to boost earnings at the Zurich-based company’s biggest business after operating profit declined 22% to $1.96 billion in the first nine months of this year.

As part of the initiative, Zurich also wants to increase the contribution of new business value from Asia, the Middle East and Latin America to 30% of the life insurance total by 2013 from the current 15% to 20%.

The company’s banking group also has loan portfolios that may be lowered, freeing more capital.

Martin Senn, who took the helm at Zurich’s global headquarters in January, rearranged his executive team, naming Patrick Manley as CEO of the European general insurance business in January. Manley replaced Annette Court, who left earlier this year when the insurer first announced its strategic review.

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Corrected December 6, 2010 at 2:58PM: yes