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(Reuters) — Zurich Insurance Group Ltd. Chief Executive Mario Greco is counting on the integration of life and general businesses and a new regional structure to provide a basis for his efforts to turn around Switzerland's biggest insurer.
Mr. Greco, 56, joined Zurich only in March after he was poached from Italian rival Assicurazioni Generali S.p.A. to help boost Zurich's struggling general insurance business and deliver a strategy for beyond the current year.
The first fruits of that strategy came on Friday with changes to structure and personnel that will see general insurance head Kristof Terryn take on the new role of chief operating officer.
Global life CEO Gary Shaughnessy will become Zurich's CEO for Europe, Middle East and Africa. Chief Operations and Technology Officer Robert Dickie will leave the company.
Mr. Greco said his aim was to simplify "the famously complicated structure of Zurich Insurance" and to remove internal barriers at Europe's fifth-biggest insurer which at times had meant different parts of the group competed with each other.
"With this organizational structure we would be in a much better position to respond to what's going in the market, in the industry, and to respond to the needs of the customer," Mr. Greco said in a call with reporters about the new structure.
In the new COO role, Mr. Terryn will focus on operations and technology as well as underwriting, claims, reinsurance, actuarial and pricing.
Mr. Greco said the new structure would support Zurich's previously announced cost-cutting program but that this was not his main motivation.
Zurich, which returned to profit in the first three months of 2016, is in the middle of a $1 billion-plus cost-savings drive and has said that around 8,000 jobs would be affected by the end of 2018. Zurich has around 55,000 employees.
Mr. Greco said the new structure would lead to further redundancies but that it was too early to quantify these.
"Today's announcement of an improved organizational structure leaving the inflexible matrix organization behind makes absolutely sense," Vontobel analyst Stefan Schuermann, who has a "hold" rating on the stock, wrote in a note.
"Helped by such action, we expect Zurich to overachieve on its cost savings targets."
In the first quarter, Zurich's global life business generated operating profit of $317 million on business volume of $7.4 billion. Overall group operating profit was $1.1 billion on business volume of $17.6 billion.
Shares in Zurich were down 0.8% percent at 225.7 Swiss francs ($231.19) at 0910 GMT, a smaller drop than the 2.3% fall in the European insurance sector index.
Zurich Insurance Group Ltd. on Thursday reported net income after taxes of $926 million for the first quarter of 2016, down 27.1% from the year-ago period.