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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

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UK

FTSE 100 marks best week since 2016, as global stocks rebound

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British retail sales slow more than expected in January. U.K. stocks leapt Friday, closing with their best weekly performance in 14 months as London's blue-chip index followed the recovery effort for battered U.S. equities. FTSE stocks held on to gains after the U.K. government reported a larger-than-expected slowdown in retail-sales growth last month.

US

Does Private Equity Really Beat the Stock Market? Readers React

MarketWatch - Last Update:

Heard on the Street's series this week on the boom in private assets elicited copious commentary from readers showing both sophistication and some need for further explanation. Our columnist, Paul J. Davies, selected some interesting comments and responded below. David Corsi complained that our stories had told him that private-equity firms were both sitting on mountains of cash and purchasing their assets using mountains of debt.

Asia

Nikkei rises as Kuroda renominated to lead Bank of Japan

MarketWatch - Last Update:

Most Asian markets closed for Lunar New Year holiday. Stocks in Japan and New Zealand gained Friday, while a number of major markets were closed for the Lunar New Year holiday, as investors regained confidence in equities after sharp slides last week. Taking cues from another robust session on Wall Street overnight, Japan's Nikkei Stock Exchange led gains in Asia, closing up 1.2%, despite a stronger yen.

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