With the over-reaching goal to improve its combined ratio by 3 to 4 percentage points by 2013 relative to its global competitors,
Last year, general insurance contributed 62% of the insurer’s profit. As recently as Nov. 30, 2010,
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
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.