(Reuters) — Zurich Insurance Group Ltd. has poached Assicurazioni Generali S.p.A. CEO Mario Greco in a move the Swiss insurer hopes will revive its fortunes and which leaves its Italian rival searching for a worthy successor.

Underscoring the challenges awaiting Mr. Greco after he engineered a rapid turnaround at Generali, Zurich issued a profit warning last week for its general insurance business, its second in four months.

"Like many global players, the company has faced market challenges in recent times but I know that Zurich's strong global franchise, the breadth of talent and the powerful brand provide all of the ingredients for our future success," Mr. Greco said in a statement announcing his appointment as CEO at Zurich.

A source had said Mr. Greco's decision to leave Generali was due to personal reasons and not to differences with shareholders of the Italian insurer. Regardless, Bernstein analyst Thomas Seidl said his departure was bad news for Generali.

"The market liked Greco and that helped mitigate the downside for the shares. Now there's room for the stock to fall closer to its €13 ($14) fair value," Mr. Seidl said.

Generali shares closed down 3.15% at €14.15 ($15.28) on Tuesday, while Zurich shares rose 0.6%.

Speculation that Mr. Greco might move to Zurich has been bubbling since mid-December. He ran the Swiss company's main general insurance business before joining Generali in August 2012 and will return as chief executive on May 1.

Mr. Greco's return to Zurich had been reported earlier by Reuters.

Turnaround architect

Zurich had looked at external candidates for the CEO spot to replace Martin Senn, who quit on Dec. 1 following a failed takeover bid for Britain's RSA Insurance Group P.L.C. Chairman Tom de Swaan had held the role on an interim basis.

Mr. Greco, who started his career at consultancy firm McKinsey & Co., took over at Generali at the height of the eurozone debt crisis after a boardroom coup ousted his predecessor.

The 56-year-old executive, a competitive road cyclist in his free time, is widely seen as the architect of a rapid turnaround that helped almost double the insurer's share price.

Under his stewardship, Generali sold assets worth €4 billion ($4.32 billion), cut costs and bolstered capital ahead of new, tougher European solvency rules.

Generali, 13.5% owned by influential investment bank Mediobanca, will have to find a successor to steer it through solvency capital requirements which kicked in this year.

"Generali's capital situation remains unclear and weak relative to peers. We have always argued that Mario Greco should have raised capital right at the start," Mr. Seidl said.

A source said the process to find a successor to Greco had started with the insurer looking inside and outside the group.

Generali said its board would meet soon over the matter.