Zurich Insurance's chief executive has a positive outlook for both the company and insurance industry as a whole, after the insurer reported better-than-expected earnings for 2017.
"The premiums are growing so we're back into developing and growing the relationship with our customers. So we feel very good about it and, actually, we feel very good about 2018 and the following year," Mario Greco told CNBC Thursday.
"We see traction and we see that the company has taken a different speed and we think this will continue and will further develop."
Zurich Insurance reported better-than-expected earnings on Thursday as the insurer dealt with a raft of natural catastrophe losses and a sluggish investment environment.
"We're riding a wave of transformation (in the insurance industry)," he said.
The Swiss insurer said 2017 net profit fell 6 percent to $3.00 billion, beating the average analyst estimate of $2.72 billion in a Reuters poll.
Greco said the company was "very, very pleased" with the earnings. "These earnings are solid, they show an improvement along all the dimensions we promised we would be working on," he said.
"It is visible in these results that the books we're acquiring are books that are more profitable than ever in the past," he added.
Europe's fifth-biggest insurer proposed a dividend of 18 Swiss francs per share, up from 17 francs a year earlier, the first time Zurich has raised its dividend in seven years.
However, the high number of disasters weighed on Zurich's general insurance combined ratio, which worsened to 100.9 percent from 98.4 percent in 2016. The combined ratio is a measure of profitability of the insurer's underwriting business, with a level below 100 meaning the insurer takes in more in premiums than it pays out in claims.
Volatility is 'normal'
Speaking about the volatility in financial markets earlier this week, Greco said it was normal.
"We've been living for a couple of years in extremely steady, quiet markets and we've lost a bit of memory of how markets are, they do have volatility, they do go up and down, this is just normal," he said.
Greco, who joined Zurich from Generali in 2016, has promised to improve the company's fortunes by making it simpler and more efficient.
The business operating profit return on equity for the year was 9.2 percent, worse than the company target of more than 12 percent. Its capital ratio (Z-ECM) - a measure of its ability to pay all its policy holders if they made a claim - reached 132 percent compared to its target of a range of 100 to 120 percent.
The company said it was making good progress on its cost savings, and by end-2017 had reduced spending by $700 million towards a $1.5 billion target.
It said it expected to achieve $400 million in net cost savings in 2018 while incurring $500 million in restructuring costs.
