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Zurich's Greco says nearly halfway to 2019 goal to cut costs: NZZ

Reuters - Last Update:

ZURICH (Reuters) - Zurich Insurance will have cut costs by $700 million by the end of the year, nearly halfway to its goal to save $1.5 billion by 2019, Chief Executive Mario Greco said in an interview published on Saturday.

'We're on track,' Greco told the daily Neue Zuercher Zeitung. 'It's a big challenge, because we must simultaneously cut costs as well as invest.'

Greco, who had engineered a turnaround at Italy's Generali , was brought in last year by Zurich to reduce the company's high cost base and simplify its business to help boost profitability that had been falling short of its own targets.

Asked if a dividend target of 75 percent of net profit was too high, Greco responded by saying the company is satisfied with its AA debt rating and has no ambition to attain AAA, meaning further measures to strengthen capital is not a priority.

'An excessive build-up of capital reserves weakens our discipline and leads to a situation where money is deployed inefficiently,' Greco said. 'Additionally, it puts pressure on the return on equity and doesn't help us any further.'

Greco told the newspaper Zurich does not need additional capital to support organic growth of its property insurance or life insurance businesses, as these already generate significant cashflow.

But the company needs to invest in internal initiatives including new digital technology to become more responsive to its customers' changing needs, he said.

'For small purchases, we have enough capital,' he told the paper, adding the company could turn to shareholders to raise cash should it decide to make a large acquisition.

(Reporting by John Miller; editing by Clelia Oziel)

(c) Copyright Thomson Reuters 2017. Click For Restrictions - about.reuters.com/fulllegal.asp

More ASIA market news

Hong Kong stocks drop nearly 2% as Chinese growth slows

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Chinese stocks log mixed finish as China's party congress gets underway

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Asian market rally shows signs of slowing

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Nikkei continues to surge to two-decade high, leading Asian market gains

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UK

FTSE 100 wobbles into the close as pound rallies on Brexit progress

MarketWatch - Last Update:

By Carla Mozee and Sara Sjolin, MarketWatch. London benchmark falls for the week. U.K. stocks significantly trimmed their gains and closed only marginally higher on Friday, weighed by a rise in the pound after a more positive tone came out of the EU summit in Brussels, seen as moving Brexit talks along.

US

FAA releases warning about laptops in checked bags

MarketWatch - Last Update:

Travelers may soon have to keep their devices on them. Soon, U.S. travelers may not be allowed to bring along laptops if they are in checked bags. The Federal Aviation Administration recently filed a suggestion with the United Nations to stop allowing passengers to check bags with laptops.

Europe

European stocks nudge higher as Catalan worries keep gains in check

MarketWatch - Last Update:

By Carla Mozee and Sara Sjolin, MarketWatch. Volvo shares rally after bullish earnings report. European stocks edged higher Friday, but with traders choosing to err on the side of caution as worries persisted about the Spain-Catalonia standoff over independence for the wealthy region.

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