Changes to UK rules governing compensation for serious injuries wiped $289m from first quarter profits at Zurich Insurance, taking the shine off an underlying improvement at the Swiss insurer.

Business operating profits fell 13 per cent to $928m in the three months to March but would have risen by 14 per cent without February’s revision to the so-called Ogden rate, which governs the way that payments for seriously injured people are calculated in the UK.

Zurich Insurance is in the midst of a restructuring under chief executive Mario Greco, who joined last year from Italy’s Generali. His plans include $1.5bn in cost cuts by 2019 and other steps to boost profitability.

Zurich Insurance said its underwriting performance had improved in the first quarter and the group was “on a solid footing” to deliver its 2017-2019 financial targets. George Quinn, finance director, added that “the stronger economic environment is also delivering a better than expected investment performance”.

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