Zurich Australia is confident of surviving in the local market despite a pullback announced by Global CEO James Schiro last week. Australia CEO John Butler said the Sydney-based operation is doing well, and will continue to play a significant role in the local market.

Slumping equity returns and increasing asbestos claims led to Zurich announcing a $3.6 billion half-year loss, compared with a $1.5 billion profit for the corresponding period last year.

 “Non-core products” and “non-core geographical areas” – defined as countries outside the United States, Britain and western Europe – must meet a new target of 12 per cent return on equity if they want to survive, and 4500 redundancies for European and British operations were also announced.

Zurich was set ambitious targets by former Chairman and CEO Rolf Huppi, who wanted the company to be a multi-layered financial services provider. Mr Butler said Zurich in Australia will no longer manufacture its own non-insurance products, instead relying on other players in the local market. “We will focus on insurance,” he said.