Net income rose to $1.27 billion from $1.06 billion in the year-earlier period, the Zurich-based company said in an e-mailed statement. That compares with the $1.08 billion-median estimate of four analysts surveyed by Bloomberg.
Zurich Insurance said in March it plans to save $250 million annually by cutting as many as 800 jobs after lowering its profit goal in December and announcing restructuring charges of $400 million to $600 million. Charges in the fourth quarter were $318 million and the firm said it booked about $20 million in the first quarter, with another $250 million expected in the remainder of the first half.
“It’s a good start to the year,” said Stefan Schuermann, a Zurich-based analyst with Vontobel who has a hold rating on the stock. “Overall the result is a bit better than expected, helped by one-off gains.”
Zurich Insurance shares rose 0.6 percent to 259.50 Swiss francs by 9:12 a.m., trimming the loss over the past year to 4 percent. That compares with the 13 percent advance in the 33-company Bloomberg Europe 500 Insurance Index in the period.
Realized gains rose to $326 million from $79 million in the year-earlier period, driven by an asset allocation “rebalance” in which the company sold government bonds, Chief Financial Officer George Quinn said during a conference call. The results was also helped by a one-time pension gain in Switzerland of $130 million, he said.
“This is a solid start to the year,” saidQuinn, who took over as chief financial officer in April, leaving the same position at Swiss Re. (SREN) “We see some early positive signs in the execution of our strategic targets for 2014 to 2016.”
In general insurance, it’s biggest unit, operating profit rose 5 percent to $845 million, helped by low catastrophe losses. Operating profit in the life unit rose 4 percent to $319 million.
Zurich Insurance is seeking return on equity, a key measure of profitability, of 12 percent to 14 percent in the three years through 2016, down from a previous 16 percent target, it said in December.
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