Switzerland’s multi-line insurance provider Zurich Insurance Group has signaled that the company is ready to divest some underperforming businesses over the next three years, as part of its strategy to boost operational profit.
The insurer said that it might miss some of the strategic goals set for 2013 as it reduced its profit goal.
The Swiss insurer said it aims to garner 12%-14% return on equity in the three years through 2016, down from a previously announced 16% target.
Zurich Insurance chief executive Martin Senn was quoted by Reuters as saying, "We will either turn around or exit those that are under-performing."
"We are very strong in some areas but we lack scale or profitability in others," Senn told the news agency.
"Based on a rigorous portfolio review, we will invest in priority markets but manage other businesses for value. This will mean improving the profitability of certain businesses, while we will either turn around or exit those that are under-performing."
The insurer has already started cost cutting plan, by eliminating certain numbers of jobs, and it expects about $600m in restructuring costs over the next one year, with two-thirds affecting the global life unit and one-third general insurance, reported Bloomberg.
In November this year, Zurich said that it would divest its remaining 9.4% stake in New China Life Insurance (NCI) for $943m (£584.7m), in order to diversify its Asian operations.
Photo courtesy of: Luis García (Zaqarbal).