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Cascading pressures lead to Zurich leadership shakeup

Posted On: Dec. 1, 2015 12:00 AM CST

Cascading pressures lead to Zurich leadership shakeup

Zurich Insurance Group Ltd. on Tuesday announced that CEO Martin Senn had resigned and will be replaced on an interim basis by Tom de Swaan, chairman of the insurer's board of management.

The move, which had been rumored for several weeks, follows poor financial results at Zurich Insurance in the third quarter of the year and the company's withdrawal from a deal to buy London-based insurer RSA Insurance Group P.L.C.

In a call with analysts Tuesday, Mr. Senn said a profit warning for the insurer's nonlife insurance operations in the third quarter and the need to pull out of the RSA acquisition were among factors in his decision to leave the company.

Mr. Senn, who has been CEO of Zurich Insurance for the past six years and who was chief investment officer before that, is stepping down by mutual consent and will leave the company at the end of the year, the insurer said in a statement.

“After 10 very intense years with Zurich, I have decided to step down as CEO and make way for new leadership. Zurich is a profitable, well-capitalized company with outstanding employees,” Mr. Senn said in the statement.

“There have been some setbacks in recent months, but I am convinced that we have put in place the right measures for Zurich to reach its targets,” he said.

After the third-quarter loss was announced, Zurich said it would undertake a strategic review of its general insurance business.

Last week, Zurich announced that it was pulling out of nonlife business in the Middle East.

And last month, the insurer announced job cuts in its U.K. nonlife operations.

“On the balance sheet, we expect a rebase of three key items: reserves, deferred acquisition costs and goodwill,” Thomas Seidl, London-based senior research analyst at AllianceBernstein L.P., said in a note to investors Tuesday.

During his period as interim CEO, Mr. de Swaan, a Dutch national, will “hold his mandates with other listed companies in abeyance,” Zurich said in the statement.

Mr. de Swaan holds several external posts including member of the supervisory board of Dutch nutrition group Royal DSM, and chairman of the board of Van Lanschot N.V., the holding company for an independent Dutch bank.

Fred Kindle, vice chairman of the board, will take on certain additional responsibilities to “ensure good governance,” it said.

“Martin Senn's departure will have no impact on Zurich's strategic focus or its financial targets,” the insurer said in the statement.

Zurich said it remains confident that it will achieve its financial targets, including a business operating profit return on equity after taxes of 12% to 15%.

“As previously announced, the company will provide information on the deployment of $3 billion in excess capital when it publishes results for 2015,” it said.