Zurich Insurance Group AG, Switzerland’s biggest insurer, posted a first-quarter profit that beat analysts’ expectations as Chief Executive Officer Mario Greco continues the overhaul of its biggest unit.
Net income fell 28 percent to $875 million from $1.22 billion a year earlier, the Zurich-based company said in a statement on Thursday. That beat the $745 million estimate by 6 analysts surveyed by Bloomberg.
“The measures we put in place to improve the performance of our general insurance business are taking effect,” Chief Financial Officer George Quinn said in the statement. “Even adjusting for a benign catastrophe claims environment, there has been an underlying improvement and we expect to see this trend continue throughout the year.”
Zurich announced cost cutting measures, promising to make a stronger use of reinsurance to insulate itself from risks and exit portfolios that don’t deliver returns, after reporting consecutive operating losses for its general insurance unit in the third and fourth quarters. Greco joined from Italian insurer Assicurazioni Generali SpA, after Zurich CEO Martin Senn and general insurance head Mike Kerner stepped down from their positions last year.
The general insurance unit posted a first-quarter operating profit of $542 million, down 23 percent from a year earlier. Farmers was down 12 percent at $343 million as its reinsurance unit, Farmers Re, reported a “small loss” due to catastrophe losses at the Farmers Exchanges.
The losses in general insurance led the company to abandon a takeover bid for the U.K.’s RSA Insurance Group Plc.