Login Register Subscribe
Current Issue

Zurich lures former exec back as CEO


Mario Greco, widely credited with turning around Italian insurer Assicurazioni Generali S.p.A., will face financial and other challenges when he returns to Zurich Insurance Group Ltd. as its next CEO.

Zurich said last week that Mr. Greco, CEO of Trieste, Italy-based Generali, will take Zurich's helm on May 1 after his term at Generali expires.

Mr. Greco will succeed Tom de Swaan, who has been interim CEO since Martin Senn stepped down in December amid intensifying problems in Zurich's nonlife unit and its eleventh-hour withdrawal from a £5.6 billion ($8.79 billion) deal to buy London-based rival RSA Insurance Group P.L.C.

Mr. Greco previously was CEO of general insurance at Zurich, which he joined in 2007, before leaving in 2012 to become Generali's CEO.

He joined Generali during the eurozone crisis and after a boardroom coup that ousted previous CEO Giovanni Perissinotto.

During his three years at Generali, Mr. Greco is widely credited with turning the Italian insurer around by cutting costs and selling assets worth about e4 billion ($4.32 billion).

Generali said it expects to hire a new CEO as soon as February.

Mr. Greco will face several challenges on his return to Zurich, which said last month that it expected to report a $100 million loss in its nonlife insurance segment for the fourth quarter of 2015 after large losses from storms in Europe, a tornado in Australia, a large credit and surety loss and several significant property claims.

Zurich has been restructuring since its fall pullout from the RSA deal and saw its third-quarter profit drop 78.6%, to $207 million, due in large part to losses from the August 2015 explosions in the Port of Tianjin, China, and in its U.S. auto insurance book.

The restructuring, intended to save at least $300 million in 2016, will see the insurer shed about 1,800 jobs, among other changes.

“I am honored to be asked to join Zurich at this critical juncture for the insurance industry,” Mr. Greco said in a statement last week.

“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,” he said.

“Mario offers the rare combination of entrepreneurial spirit, deep industry knowledge and proven CEO experience that anchored our search for Zurich's next leader,” Mr. de Swaan, chairman of Zurich's board of directors, said in the statement. “His intimate knowledge of our company and our history and his track record as a leader make him a unique candidate for the role.”

Eamonn Flanagan, head of the Liverpool, England office of Shore Capital Group Ltd., said Mr. Greco is well placed to help steer Zurich through its restructuring.

He described Mr. Greco as “a class act” who “knows Zurich well” and helped turn around the fortunes of Generali, a similarly large and complex insurance group.

Mr. Greco has a good track record and knows the industry well, Georg Marti, an analyst at Zurcher Kantonalbank in Zurich, said in an investor note.

Mr. Greco is an “experienced turnaround manager” who must now work to get Zurich's nonlife business back on track, Daniel Bischof, an equity research analyst at Helvea Baader Bank Group in Zurich, said in an investor note.

Thomas Seidl, a London-based senior research analyst at AllianceBernstein L.P., said one thing Mr. Greco must do is address Zurich's reserving position.

Rating agencies did not immediately change their ratings of Zurich after Mr. Greco's appointment was announced.

But in a note after Zurich's fourth-quarter profit warning, A.M. Best Co. Inc. highlighted execution risks associated with the turnaround plan without elaborating.