(Reuters) — French corporate raider Vincent Bollore is making his influence felt in corporate Italy by defying the country's old guard in choosing a replacement for Mario Greco as CEO of Assicurazioni Generali S.p.A.

Mr. Greco may have masterminded a three-year turnaround and a doubling of its share price, but he leaves Italy's biggest insurer without a clear successor, a capital base still short of peers, an untested growth strategy and restive investors.

Enter Mr. Bollore, a key shareholder of influential investment bank Mediobanca, which is Generali's biggest investor with a 13.5% stake.

The 63-year-old, who has had a deciding influence at several large French companies, is intent on having his say in deciding on who is chosen to tackle these challenges, sources familiar with the situation told Reuters.

Mr. Bollore was not available for comment on Generali.

Juggling diverging investor demands is nothing new at Europe's No. 3 insurer, which has long been at the heart of a tangle of cross-shareholdings interlocking the elite of Italian finance, but until now disputes have been all-Italian affairs.

Mr. Bollore's appearance on the scene challenges the dominance of Generali's other top investors. These include Luxottica owner Leonardo Del Vecchio, a veteran entrepreneur who recently called for a change of leadership at Italian bank UniCredit; and Francesco Gaetano Caltagirone, head of construction group Caltagirone.

Publisher De Agostini, whose CEO Lorenzo Pellicioli sits on Generali's board, is also involved in the insurer's governance.

Mr. Del Vecchio, De Agostini and Mr. Caltagirone did not comment.

Although shareholders are erring toward a candidate from within Generali who knows the ins and outs of the business and its transformation plans, divisions are emerging on whether the job should go to finance chief Alberto Minali or Italy country head Philippe Donnet, the sources said.

"He (Bollore) wants a Frenchman at the helm of Generali, namely Philippe Donnet," one of the sources said.

Generali declined to make Messrs. Minali and Donnet available for comment.

Mr. Bollore, who is also head of the Vivendi media empire, recently became top shareholder at Telecom Italia, although he has not yet been involved in selecting a CEO there.

In a statement later on Tuesday, Generali said it had approved the termination of Mr. Greco's contract with immediate effect, temporarily giving CEO powers to its chairman.

It said it was starting the process to find a new CEO.

Job one-quarter done

Mr. Greco's surprise departure, announced in January just months after he unveiled a new development plan, has unnerved some investors at the 184-year-old group, raising concerns it might be hard to attract and retain the right person to grow capital and dividends, while steering the insurer through new European solvency rules.

One source said institutional investors were lobbying for Mr. Minali to get the job, since he has covered numerous roles at Generali since joining in 1991.

If differences between major shareholders over who should lead the insurer cannot be bridged, there has already been talk of a compromise arrangement where executive powers would be shared between the two men, two of the sources said.

Whoever takes over from Mr. Greco, who is due to take up his new role as CEO of rival Zurich Insurance on May 1, will have to move fast to convince investors that business remains on track and that Mr. Greco's strategic plan can be delivered.

Like its rivals, Generali faces weak economic growth in its domestic market and persistently low interest rates that have eaten away at investment returns.

Mr. Greco completed the revamp of Generali a year ahead of schedule, cutting costs and selling assets to boost capital and cash, doubling the share price in three years.

But the 56-year old has admitted he is leaving with just a quarter of the job done, as a new growth phase focusing on retail business in European markets only got off the ground last year.

Exactly why Mr. Greco chose to leave when he did is still the subject of speculation within Italian business circles.

He told analysts on a conference call last month that his decision to leave had not been due to a fall-out with shareholders over strategy, but disagreements of a personal nature and over his role in the new growth phase.

The fact that talks over renewing his contract had dragged on for months led some to conclude that strategic differences rather than money were behind his move.

Unlike main rivals Allianz S.E. and Axa S.A., Generali has yet to disclose its approved Solvency II ratio, and some investors are concerned over its focus on slow-growing insurance markets in Europe, such as Germany, as well as its exposure to Italian state bonds and Italian banks.

Generali, which has a bigger proportion of its business in life insurance than its main rivals, had a pro-forma economic solvency ratio of 196% at the end of September, compared with Axa's 212% and Allianz's 200%.

Since then, turbulent markets have further affected insurers' balance sheets.

"Greco has left Generali in a precarious situation with one of the weakest capital bases of peers and high investment risks. The next two years are going to be very difficult," Bernstein analyst Thomas Seidl said.