Zurich Insurance struck a confident note on Thursday, with a $1 billion share buyback and its first dividend hike in seven years as it reported better-than-expected earnings despite hefty catastrophe payouts.

The move to boost shareholder returns was hailed as a sign Zurich had turned the corner on an overhaul it is now midway through and shares in Europe’s fifth-biggest insurer were up 2 percent to 307.70 Swiss francs by 1150 GMT.

“This is a picture of a company that is extremely healthy, growing, with a strong view on what markets will bring us in the future, and we want to lead this market and this market transformation,” Chief Executive Mario Greco said.

“We think that the success of 2017 will give us strong traction to be even more successful in 2018 and 2019,” Greco, who joined from Generali in 2016, added.

Greco wants to make Zurich simpler and more efficient and it is targeting $1.5 billion cost cuts by the end of 2019, $700 million of which have been achieved so far, as it seeks to improve technology and bring its business closer to clients.

“Zurich delivered strong results demonstrating that the restructuring plan is gaining momentum,” Keefe, Bruyette & Woods analysts said in a note. “The group sent a clear signal that it is confident about future earnings growth potential.”

Zurich, which proposed a dividend of 18 Swiss francs per share, a 5.9 percent increase on its payouts since 2010, said 2017 net profit fell 6 percent to $3 billion as it dealt with natural catastrophe losses and a slow investment environment.

However, the profit figure beat the average analyst estimate of $2.72 billion in a Reuters poll.

Disaster Recovery

Insurers will have to pay claims of around $135 billion for 2017, the most ever, following hurricanes, earthquakes, and North American fires, a recent report said.

Disasters weighed on Zurich’s general insurance combined ratio, which worsened to 100.9 percent from 2016’s 98.4 percent.

The combined ratio is a measure of profitability of the insurer’s underwriting business, with a level below 100 meaning it takes in more in premiums than it pays out in claims.

But the expensive year — which a Munich Re study found to have the second-highest economic losses in history — also helped the industry finally turn around falling prices.

Zurich said North American rates rose 1.6 percent in the fourth quarter in its general insurance business, and Greco said further rate increases are expected this year.

The share buyback, which Zurich said would help offset dilution from shares paid out as part of the group’s employee remuneration policy, marks a one-off event, which management said would not be repeated at a similar scale in years ahead.