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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 closes lower as RBS, IAG tank after results

MarketWatch - Last Update:

By Carla Mozee and Sara Sjolin, MarketWatch. A stronger pound is also weighing on stocks in London. U.K. stocks declined on Friday and suffered a weekly loss, with shares of Royal Bank of Scotland PLC and International Consolidated Airlines Group SA leading the charge south after results.

Europe

European stocks swing to positive for the week, tracking U.S. stocks higher

MarketWatch - Last Update:

By Carla Mozee and Sara Sjolin, MarketWatch. RBS shares drop after results; Deutsche Telekom shares rise. European stocks ended a bouncy session slightly higher on Friday, tracking gains for U.S. stocks as traders waded through a stream of corporate updates.

Asia

Asian equities advance for further recovery

MarketWatch - Last Update:

But major Asian benchmark on course for losing February. Asian equities on Friday continued to recover from midweek losses, extending gains into a second straight week. The rebound has reversed much of the declines seen during a wrenching selloff early this month, which were stoked by interest-rate worries.

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