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(Bloomberg) -- Zurich Insurance Group AG, Switzerland’s biggest insurer, reported a 20 percent drop in fourth-quarter profit on lower income from its general insurance unit.

Net income fell to $858 million from $1.07 billion a year earlier, the Zurich-based insurer said in a statement Thursday. That compares to the $785 million average estimate of five analysts surveyed by Bloomberg. Operating profit from general insurance, the biggest unit, declined 30 percent in the quarter to $518 million on lower revenues.

“While we made good progress last year in executing the strategy we set out in December 2013, we cannot be satisfied with our 2014 earnings,” Chief Executive Officer Martin Senn said in the statement. “In general insurance, we continue to make good progress in improving our accident year combined ratio, although the results show that we have still much to do in our turnaround businesses, and in driving further improvement across the book.”

The company has cut 670 jobs to help lower costs by $250 million annually by the end of this year. It also started selling under-performing businesses including a Russian general insurance company to Olma Group to help it boost earnings. Zurich targets a return on equity, a key measure of profitability, of 12 percent to 14 percent in the three years through 2016, down from a previous 16 percent target.

The insurer plans to maintain its dividend at a 17 Swiss francs ($18.30) a share, a level it kept since the payout for 2010. That matched the Bloomberg Dividend Forecast.

The shares are almost unchanged in Swiss trading this year valuing Zurich at 47 billion francs. That compares with a 9.8 percent gain in the Bloomberg Europe 500 Insurance Index.

To contact the reporter on this story: Oliver Suess in Munich at osuess@bloomberg.net To contact the editors responsible for this story: Mark Bentley at mbentley3@bloomberg.net Cindy Roberts, Elisa Martinuzzi

Bloomberg