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2015 marked by management shifts at biggest insurers

2015 marked by management shifts at biggest insurers

Management changes at the highest levels of some of the world's largest insurers emerged as one of the biggest stories of the year.

Market woes, illness and other issues all factored into in the management shifts. But analysts say companies that had a well-defined succession plan in place or an enterprise risk management framework made more orderly changes.

Late in the year, a series of setbacks led to the resignation of Zurich Insurance Group Ltd. CEO Martin Senn. Zurich's attempt to buy British insurer RSA Insurance Group P.L.C. was scuttled at the last minute. Zurich also had problems with its U.S. auto business and sustained a $275 million loss in August explosions at the Chinese port of Tianjin.

Tom de Swaan, chairman of Zurich's board of management, became interim CEO until a successor can be named.

Mike Kerner, CEO of general insurance, and Daniel Riordan, CEO of global corporate business in the United States, already had departed when Mr. Senn left as Zurich undergoes restructuring.

Restructuring also cost senior positions at American International Group Inc.

Faced with a third-quarter loss topping $230 million, AIG President and CEO Peter Hancock said the insurer would eliminate about 23% of its 1,400 senior management jobs. He made good on that in early December, when — under pressure from activist investor Carl Icahn to split the company into three pieces — Mr. Hancock announced a major corporate restructuring. Among those leaving AIG after a transition period are Chief Financial Officer David Herzog, who will retire next year, and John Doyle, CEO of commercial insurance.

Mr. Hancock has been at AIG's helm since mid-2014, when he succeeded former AIG President and CEO Robert H. Benmosche, who had been battling cancer. Mr. Benmosche, who died in February of this year, was widely credited for leading AIG's turnaround since its federal bailout in 2008.

At Hartford Financial Services Group Inc., former CEO Liam McGee stepped down as executive chairman in early 2015 as he also battled cancer. Mr. McGee, who was succeeded by Christopher J. Swift as chairman and CEO and won plaudits for reviving Hartford's fortunes, also died in February.

Illness also led to a change at the top at Travelers Cos. Inc., where CEO Jay S. Fishman announced in August that he was suffering from a variant of Lou Gehrig's disease and would step down as CEO on Dec. 1 but remain as chairman. Alan Schnitzer, the CEO of Travelers' business and international insurance, its largest business segment, succeeded Mr. Fishman.

Also in August, William R. Berkley said he would step down as CEO of W.R. Berkley Corp. on Oct. 31 after his 70th birthday, to be succeeded by son W. Robert Berkley Jr., the Greenwich, Connecticut-based insurer's president and chief operating officer. The elder Mr. Berkley remains as chairman.

Retirements were not confined to the underwriting side.

In late September, H. Wade Reece said he would retire as chairman and CEO of BB&T Insurance Holdings Inc. on Dec. 31 after taking the Raleigh, North Carolina-based business from a regional player to one of the world's top 10 brokers. The company said John Howard, who will retain his current position as CEO of BB&T Insurance Holdings' wholesale and specialty division, would succeed Mr. Reece.

In most cases, analysts said, companies did a good job of handling the challenge of leadership changes.

Insurers practice enterprise risk management, a discipline which includes talent and succession planning, said Jim Auden, managing director of insurance at Fitch Ratings Inc. in Chicago. “That's something companies take pretty seriously ... Most companies have some depth of management, so if there is a more sudden departure, they can reach into management levels,” he said.

“A number of the most notable changes were very orderly, and it was clear that a number of these companies had a plan,” said J. Paul Newsome, managing director of Sandler O'Neill & Partners L.P. in Chicago. But he also said some changes stemmed from mergers.

“For the most part, these were planned or coordinated in response to events,” said Mark Dwelle, an analyst at RBC Capital Markets L.L.C. in Richmond, Virginia. “They took the steps they needed to do and they did it in an organized manner and it wasn't reactionary.”

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