Insurer Zurich says to cut 500 million dollars in costs

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Swiss insurer Zurich Financial Services said on Thursday it intended to shave 500 million dollars (380 million euros) or 5.0 percent from its global costs but that this would not translate into job cuts.

About 350 million dollars in savings would be made by its general insurance division, said the group in a statement.

"The economic conditions in developped countries will not improve a lot in the short term," and therefore, the group "must adjust its strategy," said chief executive Martin Senn.

Senn pointed out however that the cost cutting exercise will not lead to job reductions.

"It is not about reducing our staff numbers," he said.

The insurer said that it aimed to pay out an "attractive" dividend to investors, although it did not outline figures.

Zurich paid out 16 francs per share in dividends for 2009, and analysts at Bank Vontobel expects at least 17 francs for 2010.

The insurer reported in early November an 18-percent drop in net profit for the first nine months of the year to 2.4 billion dollars.

© 2010 AFP

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