Under-pressure Zurich Insurance chief Senn steps down
ZURICH (Reuters) - Zurich Insurance chief Martin Senn has suddenly quit after coming under pressure following a botched takeover bid and a stuttering performance in its main business, prompting the Swiss insurer to seek an outsider to get it back on track. Chairman Tom de Swaan has taken temporary charge of the company, which said on Tuesday the change in CEO was by mutual agreement and wouldn't affect its strategic focus.
However, the intention to go for an external appointment may signal a desire to shake up a business that has faced criticism for erratic earnings and a cautious approach to takeovers following its failed tilt at Britain's RSA .
"What's the merit of appointing a new CEO if nothing changes?" J. Safra Sarasin analyst Javier Lodeiro, who has a "neutral" rating on the stock, said. "I really would assume that any new CEO will want to have a review of reserves and strategic positioning."
Zurich did not say if 58-year-old Senn, in the post since January 2010, would receive a payoff. He received 7.2 million Swiss francs (£4.6 million) in total pay, bonuses and other compensation in 2014, according to the company's annual report.
De Swaan said Zurich was looking for an external candidate who is an "entrepreneurial leader with deep knowledge of the insurance industry and CEO experience". He told reporters he had high hopes Zurich would find a new CEO relatively soon, without elaborating.
He added that Zurich had no intention of changing its dividend policy, seen as one of the main attractions of the stock. In 2014, it paid out 17 francs per share, putting the shares on a yield of around 6 percent if that were repeated this year at the stock's current price.
SPARE CASH
Zurich also restated it would provide information in February, when it publishes its results for 2015, on whether it plans to invest its $3 billion in spare cash or return it to investors.
Senn's departure is the latest exit from Zurich's top ranks after the 2013 resignation of Josef Ackermann as chairman over the apparent suicide of finance chief Pierre Wauthier. It follows mounting pressure on Senn to boost performance at its key general insurance (GI) business, as well as the abandoned takeover attempt of RSA.
Zurich, which in November posted a 79 percent drop in quarterly net profit, partly due to losses from explosions in the Chinese port of Tianjin, had appointed a new unit head and outlined measures to boost GI, but it was not enough to dampen speculation over Senn's future.
Daniel Haeuselmann, head of Swiss equities at asset manager GAM, said Senn had been put in a difficult position but questioned the logic of his leaving before a permanent replacement was in place.
"When you have a CEO for six months I don't think this brings the company much further because the whole organisation will wait for the new CEO," Haeuselmann, who owns Zurich stock, said.
Senn said he was leaving now so Zurich would have a new CEO to prepare its targets through to 2021. "Ideally we (would) have someone in place to lead that process right from the beginning," he told reporters.
Zurich shares were down 0.7 percent by 1155 GMT in a broadly flat European sector <.SXIP>.
(Editing by Sunil Nair and David Holmes)
