European giant Zurich Financial posted a widely expected $5.5 billion net loss for 2002 on an operating profit of $1.7 billion. The loss continues the company’s two-year losing streak, but new CEO Jim Schiro has drawn a line in the sand, cutting dividends and taking writedowns on the accounts.

The company had been priming the market for some months that the loss would be a big one. Mr Schiro told a media conference he expects the group to fall short of its 12% return on equity target this year.

Ratings agency AM Best helped things along by confirming that Zurich’s A (Excellent) rating will not change, and that the outlook for the company is positive.

Meanwhile, French financial services conglomerate Axa has recorded a profit of $1.7 billion for 2003, an 82% profit increase over 2002’s September 11-soured result. Analysts said the Paris-based international’s result reflects securities writedowns and one-time costs balanced by strong general insurance results.