CompaniesFeb 12 2016

Zurich UK Life boss ‘chuffed’ with 2% profit dip

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Zurich UK Life boss ‘chuffed’ with 2% profit dip

Zurich UK Life’s interim chief executive said he is really happy with the firm’s results, despite seeing a dip in operating profits last year.

In its full year results, released yesterday (11 February), the insurer reported a 2 per cent fall in operating profits, dropping to £113m last year from £115m in 2014.

Speaking to FTAdviser, the current head of Zurich’s UK life arm Jim Sykes, said: “We are down slightly on our headline profit, but we are really chuffed about that, because we know we had a very large one-off event in 2014 which wasn’t really repeatable.

“We are really pleased that it’s moving in the right direction,” he added.

In 2014, Zurich faced large one-off costs relating to policyholder tax benefits and in 2015 the provider blamed profit falls for the first half of the year on lower bond yields and stock market.

Mr Sykes said comparing 2015’s profits with the previous year was “not particularly meaningful”, adding that if the one-off item had not been included in last year’s figures, then the business would have seen a “comparable rise” to other life insurers.

“We can’t necessarily choose when those one-off items appear on our results.”

He also argued the firm has worked “really hard” to manage its legacy books, pointing to the deal with Rothesay Life as a positive move.

“We have done a load of other efficiency work and margin management work during 2015, which has helped us a lot.

“Our two protection businesses, the retail and the corporate, are both contributing quite significant profit now and that’s been growing year on year, so underlying we have got some really positive changes in there.”

Mr Sykes also pointed out that growth in the wealth business was driven by the expansion of its retail platform, while the new business margin was up 16 per cent; 2.5 per cent higher compared to last year.

“I’m not interested in having lots more business if we haven’t got the margin,” he stated.

Mr Sykes was also “absolutely convinced” that the Swiss group would be investing more in the UK, suggesting that it is gaining market share, pointing to growth in the retail protection proposition over the past 18 months.

As a side note, he added that Zurich has some “exciting plans” in the pipeline to provide more tools and facilities for advisers over the coming year.

“It is really crucial to help the adviser in their back office and we have got a long-term focus in that space to try and make us indispensable.”

katherine.denham@ft.com