Zurich focuses on increasing profitability in 2017-19 targets
Zurich Insurance Group has set a target of $1.5 billion in net savings by 2019 in an update given to investors and analysts on plans to strengthen its business model.
Furthermore, Zurich hopes to achieve a business operating profit after tax return on equity (BOPAT ROE) in excess of 12 percent from 2017, growing over the period.
Zurich said its strategy will focus on increasing profitability, consolidating the group’s position for its property/casualty and life business, as well as building customer relationships, simplifying the business and significantly reducing costs.
As it renews its focus on profitability, Zurich is hoping to target cash remittances in excess of $9.5 billion and a new dividend policy with a target pay-out ratio of around 75 percent of net income after tax attributable to shareholders (NIAS).
The group also targets a Zurich Economic Capital Model (Z-ECM) ratio of 100 – 120 percent, unchanged from the previous financial targets.
Mario Greco, group CEO, said: “Zurich is a very strong insurance group, with a leading global position in commercial insurance, excellent capital strength and a very trusted brand. In the next three years, we will focus on execution to increase business profitability through delivering high-quality earnings. We will also differentiate ourselves by delivering first-class client service.
“We are reshaping the business for new market realities and to best equip us for future success. We will become stronger as the competitive landscape shifts, establishing a sound base for future growth.
“We feel very confident about delivering on our ambitious financial targets and we are committed to drive the business with rigorous discipline. We have the right management team in place, we have set the right accountability and we are engaging our employees to play their full part in Zurich’s successful future. With this, we are well positioned to deliver sustainable improvement in earnings which will support an increase in the return of capital to shareholders over time.”
