Zurich has reported net income of $US1.5 billion ($1.91 billion) for the six months to June 30, down 7% on the corresponding period last year.

However, business operating profit, excluding the impact of changes to the Ogden discount rate in the UK, was up 14%, and the insurer says it is on track to hit turnaround targets.

Cost savings of about $US550 million ($698 million) have been achieved towards the target of $US1.5 billion by 2019.

“I am very pleased to report results that show what dedicated people can accomplish in a relatively short time, as we grow our businesses in local currencies, improve our underwriting and expand our customer reach, all while reducing our cost base,” Group CEO Mario Greco said.

“Based on that performance, we are confident we will maintain this positive momentum, which positions us well to improve our shareholders’ returns and drive sustainable dividend growth.”

The combined operating ratio for the half worsened slightly to 99.5% from 98.1%, and property and casualty gross written premium (GWP) fell 3% to $US18.01 billion ($22.85 billion). Asia-Pacific GWP was up 3% in local currency, “driven by all countries, but especially Australia and Hong Kong”.

Since June 1 the group has assumed underwriting for a portion of the Cover-More portfolio, with about $US20 million ($25.37 million) of GWP in the quarter. The acquisition of the Australian travel insurer is singled out as a business highlight, “solidifying Zurich’s position as a leading global travel insurance provider”.