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(Reuters) — Mario Greco is stepping down as chief executive of Italy's biggest insurer, Assicurazioni Generali S.p.A., and is likely to join Swiss rival Zurich Insurance Group Ltd., two sources close to the matter told Reuters.
Speculation that Mr. Greco, who ran the Swiss group's insurance business for five years before joining Generali in August 2012, could return to Zurich, has been bubbling since mid-December.
According to one of the sources, Mr. Greco has not yet finalized his departure, which is due to personal reasons and not because of differences with shareholders in the Italian insurer.
Generali and Zurich declined comment.
"This is 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 fair value," said Bernstein analyst Thomas Seidl.
Generali shares closed down 3.15% at €14.15 ($15.28), while Zurich shares were up 0.6%.
Zurich is seeking to hire a new CEO from among external candidates after Martin Senn quit on Dec. 1 following a failed takeover bid for Britain's RSA.
Underscoring the challenges awaiting the Swiss company's next CEO, Zurich issued a profit warning in January for its general insurance business, its second in four months, threatening its dividend.
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 €4 billion ($4.32 billion) worth of assets, cut costs and bolstered capital ahead of new, tougher European solvency rules.
Generali, 13.5% owned by influential investment bank Mediobanca, will now have to look for a successor to steer it through new solvency capital requirements that 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.
One of the sources said that the process to find a successor to Mr. Greco had started with the insurer looking both inside and outside the group.
(Reuters) — Italian insurer Assicurazioni Generali S.p.A. expects its net profit to rise significantly this year as it reaps the rewards of a three-year-old turnaround plan, it said on Thursday after its reported its highest first-half earnings since 2007.