Lower income precipitated a major plunge in profits for a prominent international insurer during the fourth quarter of 2014, it was announced today.
Insurance Group AG saw its net income fall from $107 billion in Q4 2013 to $858 million in the same period this past year. This was driven largely by a 30% decline in operating profit from general insurance—Zurich
’s biggest unit—which fell to $518 million.
Shares of the Swiss company dropped 3% on the news to 303.4 francs.
Zurich CEO Martin Senn said the company is not satisfied with its results, adding that business operating profit return on equity was “below our target range” at 11%.
“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,” Senn said.
He added that "we need to do more to improve our profitability," and said the company has "actions under way across the business."
Zurich is already planning to generate annual cost savings of $250m by the end of this year, including making 300 redundancies. The company did not spell out any additional cost saving plans on Thursday, although it has pledged to deliver more “efficiencies”, such as through better procurement.