Swiss Re to Cut Work Force by 10%; Galvagni Named COO

Swiss Re has announced cost cutting moves aimed at saving around CHF 400 million ($349 million) “by the end of 2010.” It plans to layoff around 10 percent of its global workforce in order to achieve the reductions.

The reinsurer also announced that it has named Agostino Galvagni as Chief Operating Officer and Member of the Executive Committee, effective May 1st 2009.

Swiss Re explained the cost reductions as a step “to enhance the company’s leading position in the reinsurance sector, Swiss Re is taking steps to increase its focus on profitable core business and strengthen its capital position.”

The move continues the shakeup following Swiss Re’s $865 million loss for 2008 and the departure of Jacques Aigrain as CEO [See IJ web site – https://www.insurancejournal.com/news/international/2009/02/12/97840.htm] His replacement, Stefan Lippe has indicated he will curtail the giant reinsurers non-core activities, including the reduction of its securitization initiatives, which had been favored by Aigrain and his predecessor John Coomber.

Lippe praised Agostino’s ability to produce “business focus and delivery of results,” adding that he “will strengthen our leadership team,” and brings “in-depth business and client servicing experience to this role.”

The bulletin added that “in line with Swiss Re’s focus on profitable core (re)insurance business, the company will continue to explore opportunities to free up capital in order to deploy it to the most profitable business segments. At the same time, Swiss Re will concentrate on conservatively managing the assets generated through (re)insurance activities and continue derisking the investment portfolio.

“Swiss Re has reinforced its financial strength with the capital measures approved by Swiss Re’s shareholders on 13 March 2009. Swiss Re accelerates its efforts to simplify the organization and to improve operational effectiveness, resulting in significant cost savings. To this end, the company will streamline the worldwide office network.

“Swiss Re will operate through offices that are solely dedicated to servicing clients and will further consolidate support resources into fewer locations in order to achieve economies of scale. Swiss Re intends to reduce its current global headcount of 11,560 by approximately 10 percent over the next twelve months. Any reductions will be undertaken in compliance with applicable laws and regulations.”

Source: Swiss Re – www.swissre.com