* Zurich Insurance posts second consecutive earnings beat
* First full quarter under CEO Mario Greco
* Confidence restored that Zurich can deliver turnaround
* Company says early steps in restructure yielding fruit
* More measures to be taken, CFO says (Recasts, add CFO comments, market reaction)
By Brenna Hughes Neghaiwi
ZURICH, Aug 11 (Reuters) - Zurich Insurance ZURN.S surprised the market by making a profit from its general insurance premiums despite a quarter beset by natural disasters, in an early sign new management can deliver on hopes for a turnaround.
The Swiss insurer, under the leadership of new Chief Executive Mario Greco, said on Thursday operating profit rose 17 percent to $1.11 billion in the second quarter, beating market expectations for a fall. joined Zurich in March after it poached him from Italian rival Generali GASI.MI to help boost the struggling general insurance business and deliver a new strategy.
Greco's overhaul, previewed in June, gained traction as the group boosted efficiency in general insurance.
"As we prepare for the next strategy cycle, we have already taken steps to simplify our management and operating structures, which will allow us to better serve our customers and respond more easily to external developments," Greco said.
Last September, losses stemming from explosions in China prompted Zurich to abandon a proposed 5.6 billion pound ($7.26 billion) bid for British insurer RSA RSA.L . CEO Martin Senn quit suddenly in December after coming under pressure following the botched takeover bid and a stuttering performance in its main business. warning on profits in January due to large losses from winter storms in Britain and Ireland, Zurich posted a $424 million loss for the last three months of 2015.
Zurich was already in the midst of a $1 billion-plus cost-cutting drive when Greco arrived.
In June he announced the integration of Zurich's life and general businesses and a new regional structure. His full strategy is set to be unveiled in November.
"Cost is an issue for the entire sector. For us, we've made it a key priority. Mario's arrival has injected even more urgency into that topic," Chief Financial Officer George Quinn told Reuters.
"There is more that we have to do to achieve the goal that we have," he said.
Markets embraced the results with a 4.6 percent gain in the company's share price, which Quinn said showed confidence slowly being restored after two consecutive quarters of forecast-beating results. PROBLEMS
Zurich has struggled with underperformance in general insurance, its largest source of earnings which sells services such as property and casualty insurance.
That business narrowly turned a profit on its premiums in the second quarter despite particularly disaster-heavy months hitting insurers' results. disasters such as Canada's Fort McMurray wildfire, flooding in Europe and hail storms in Texas amounted to $200 million in second-quarter losses.
Its combined ratio of 99 percent -- a level below 100 indicates it took in more in premiums than it paid out in claims -- beat analyst estimates for 101 percent.
"Zurich Insurance reported a strong set of second-quarter numbers, beating our and consensus expectations handsomely," Bank of America Merrill Lynch (NYSE:BAC) analysts said in a note. "The main driver is a stronger than expected performance in GI (general insurance), showing clear progress both in terms of cost and loss ratio, key to the turnaround of the operations."
The analysts expected annual net profit growth of 25 percent for 2015-18, reaffirming their "buy" rating on the stock.
Greco declined to reveal more strategy details just yet. ($1 = 0.7711 pounds)