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By Brenna Hughes Neghaiwi
ZURICH, March 27 (Reuters) - Zurich Insurance said on Monday it was seeking shareholder authorisation to raise its capital so the board had the flexibility to fund acquisitions or cope with any "extreme stress events", but had no plans to issue new shares now.
Europe's fifth biggest insurer will ask shareholders on Wednesday to approve an increase of capital by up to 45 million shares by March 2019, extending existing authorisation for issuing up to 10 million shares by March 2018.
The Swiss group has 150.7 million registered shares outstanding, according to its investor relations site.
A Zurich spokesman said the new authorisation was so the board could raise money for acquisitions or meet regulatory requirements in "times of extreme stress events."
"The proposed change to the authorised and contingent capital is an overall and comprehensive proposal to provide the board with more flexibility with regard to capital raising," he said in an emailed statement.
But he said the board had no specific deals in mind, saying Zurich's strategy was to deliver earnings and dividend growth, without needing to pursue mergers and acquisitions (M&A). "We do not need M&A to deliver on our financial targets," he said.
The Swiss insurer is in the middle of a $1.5 billion drive to cut costs and simplify a complicated structure.
Chief Executive Mario Greco has already denied the firm has any appetite for major acquisitions.
But the group has said bolt-on buys were possible, like its $551 million purchase of Australian travel insurer Cover-More.
Analysts have rated the group's capital position as strong following recent results. One said he did not anticipate any significant rights issue in the near term.
According to the agenda for Wednesday's request to shareholders, Zurich could restrict or exclude shareholders' subscription rights, allocating 15 million shares to a third party or within the company in order to fund takeovers and investments or to improve the company's regulatory capital position "in a fast and expeditious manner".
It is also seeking permission to raise contingent share capital by up to 30 million shares, from 10 million now. (Additional writing by Joshua Franklin; Editing by Michael Shields and Edmund Blair)