The Swiss insurer’s net income after tax attributable to shareholders (NIAS) jumped 342% in the third-quarter to $912m (£734m, €825m), beating most analyst’s forecasts. The NIAS for the first nine months was $2.5bn, 11% higher than the same period of 2015.
This is a sharp reversal on the position at the half-year stage of the year when NIAS was down for both the second quarter and the first half of the year.
Zurich said the improvement was largely due to underlying improvements in the General Insurance division and continued strong performance from Global Life and Farmers, a wholly-owned, US-based insurance services company.
Cost cutting drive
However, the insurer did also single out the impact of its cost cutting drive and the efficiency improvements undertaken after a tough 2015 saw the business struggle.
“The strengthening of Zurich’s management team and simplification of the group organizational structure have been completed, while absolute costs have continued to fall reflecting actions taken earlier in the year,” Chief Financial Officer George Quinn said in a statement.
Zurich had already begun a $1bn-plus cost-cutting drive when Greco arrived from rival insurer Generali in March after large losses in the insurance division had caused the company to issue two profit warnings in 2015 and part ways with previous chief executive Martin Senn.
In the Global Life division, Zurich said performance improved in all regions except North America.
“The improvement was driven by underlying growth in Latin America and a favourable experience relative to assumptions in Europe, Middle East and Africa (EMEA) and Asia Pacific,” it added.
Gross written premiums, policy fees and insurance deposits for the nine months to the end of September increased by 5.5% to $22.5bn, with robust growth in EMEA and Asia Pacific.
Zurich said it plans to hold an investor day in London on 17 November at which Greco will announce further details of his strategy to revamp the company.
Greco so far has combined the insurer’s life and general businesses, as well as its corporate and commercial businesses, and introduced a new regional structure to help streamline the company’s complicated organisation.
Zurich has struggled with underperformance in general insurance, its largest source of earnings, which sells services such as property and casualty insurance.
“General Insurance continues to show underlying improvement across much of the portfolio but has not yet achieved the expected levels of profitability,” the company said.
It also announced two new appointments to strengthen Greco’s management team.
In an internal promotion Isabelle Welton has been appointed Group Chief Marketing, Communications and Culture Officer, effective immediately.
Welton will be succeeded in the group chief human resources position by David Henderson, who has joined Zurich from MetLife where he currently serves as Executive Vice President, Human Resources. Henderson’s appointment is effective January 1, 2017.