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Storms knock down Zurich P&C profit

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Zurich Group’s net profit fell 6% to $US3 billion ($3.9 billion) last year as the “exceptional impact” of hurricanes hit its property and casualty (P&C) business.

Overall business operating profit dropped 15% to $US3.8 billion ($4.9 billion).

“In a year of historic weather events, our focus and discipline delivered strong performance,” CEO Mario Greco said.

“We improved underwriting, reduced costs and expanded our service offerings, while growing premiums and improving our customer retention levels.”

Hurricanes Harvey, Irma and Maria had a combined impact of $US700 million ($900 million) on the P&C business, which saw operating profit fall 37% to $US1.55 billion ($1.99 billion).

The division’s gross written premium and policy fees stayed at about $US33 billion ($42.4 billion) and the combined operating ratio blew out to 100.9% from 98.1% in 2016.

Rates increased 2% last year. In North America the rise was especially pronounced in the fourth quarter following the hurricanes.

Zurich’s efforts to cut expenses continue to yield dividends, with cumulative cost savings of $US700 million ($896.5 million) last year, putting the insurer on track to hit its 2017-19 target of $US1.5 billion ($1.9 billion).