* 2016 net profit jumps 74 percent
* Analysts unconvinced on Zurich goals
* Shares down 1.8 pct
(Recasts, adds detail, quotes)
By Brenna Hughes Neghaiwi
ZURICH, Feb 9 Zurich Insurance has
limited appetite for major acquisitions, Chief Executive Mario
Greco said on Thursday after the company posted a 74 percent
jump in full-year net profit.
With the insurer in the middle of a major overhaul focused
on streamlining and cutting costs, Greco said the strategy is
about limiting rather than adding bureaucracy.
"I would argue that massive size does not help to be focused
on the needs of the customer and actually creates big
bureaucracy. It creates high costs and creates distance from the
customer's needs," he told reporters.
"Our strategy does not depend on acquisitions. Our strategy
is organically based."
Though Greco played down the likelihood of a big deal,
acquisitions are not totally out of the picture.
"As last year demonstrated, whenever we find interesting
opportunities, we go for them," he said, referring to December's
move to buy Australia's Cover-More Group.
Zurich, Europe's fifth-biggest insurer, had not received any
takeover approaches, Greco told Reuters, adding that the
company's $40 billion-plus market value serves as a shield from
Greco, recruited from Italian rival Generali last
March, admits that much work remains to be done if Zurich is to
achieve ambitious 2019 goals, but he is already delivering on a
pledge to simplify the famously complex group and cut costs.
Results also benefited from fewer natural catastrophe losses
and efforts to curtail less profitable business in its core
general insurance unit, helping the group to recover from
mis-steps in 2015, including a botched takeover bid for
Zurich reiterated targets Greco set in November, which upped
cost-cutting goals to generate net savings of $1.5 billion by
2019, compared with 2015, while trimming the main profitability
goal to a more achievable level.
Analysts have been receptive to Greco's revamp plans -- its
share price has risen more than 40 percent since a January 2016
low -- but question whether they are too ambitious.
Shares in the company were down 1.8 percent at 278.90 Swiss
francs by 1357 GMT.
"Firstly, we think the cost-cutting plans will be very hard
to achieve," Bernstein analysts wrote in a note. "Secondly, part
of the cost savings will be competed away as peers are
undertaking similar cost-efficiency programmes."
Zurich's full-year net profit rose to $3.21 billion, short
of the average estimate of $3.32 billion in a Reuters poll of 11
analysts. Fourth-quarter profit climbed to $685 million, against
a $424 million loss in the last three months of 2015.
(Editing by David Goodman)