Swiss RE’s CEO Jacques Aigrain resigned today, Thursday, February 13, a week after U.S. investor Warren Buffett stepped in with new capital and the reinsurer said it was disbanding its financial markets business.
Swiss Re said Aigrain has been replaced by his deputy Stefan Lippe with immediate effect. Aigrain will support a transition until Feb. 19 when the group is scheduled to update on its strategy and give its full results for 2008, having already revealed last week a net loss for the year of around CHF1 billion ($865 million) [See IJ web site – https://www.insurancejournal.com/news/international/2009/02/05/97610.htm].
“His proven track record in insurance will support our efforts to focus on our core business,” Chairman Peter Forstmoser said in a statement.
The appointment of Lippe, a reinsurance expert with 25 years experience at Swiss Re, marks the company’s move away from its foray into investment banking under Aigrain.
Last week U.S. investor Buffett stepped in with CHF 3 billion ($2.58 billion) of new capital for the world’s second biggest reinsurer after the group reported a CHF 6 billion ($5.156 billion) writedown on toxic assets.
Swiss Re shares, which have lost almost two thirds of their value since the beginning of this year, were up 6 percent at CHF 20.08 ($17.86) by 0820 GMT on Thursday.
Analysts said Lippe’s appointment should reassure shareholders and give support to the stock. “The fact they’re bringing in an insurance man who can start cleaning up the company is really big, bold news,” said Kepler Capital Markets analyst Fabrizio Croce. “We can see light at the end of the tunnel, even if it’s a long way off.”
Swiss Re said last week it would disband its financial markets activities and consider raising further equity of up to CHF 2 billion ($1.72 billion).
“What’s different to Aigrain is that Lippe has the respect of the employees,” said Croce, adding that the company should now have no problems raising extra capital from existing shareholders.
Aigrain, a former JP Morgan investment banker, joined Swiss Re in June 2001 as head of Financial Services and became chief executive at the start of 2006 in a bid to boost Swiss Re’s performance, which had been unspectacular under former CEO John Coomber.
Aigrain’s successor Lippe took over as deputy chief executive and chief operating officer in September 2008. Before then he led the group’s property and casualty and life and health underwriting units.
“I am clear about the challenges that Swiss Re needs to address,” Lippe said in a statement. “Our core re/insurance portfolio is sound. We are focused on meeting our clients’ needs, creating shareholder value and providing quality career opportunities in a stimulating business environment.”
Conversion of Buffett’s investment via permanent capital instruments would take his Berkshire Hathaway investment firm’s stake in Swiss Re to around 24 to 25 percent. Berkshire is best known for its insurance holdings, which generate about half of overall results and include the reinsurer General Re Corp.
The deal extended a relationship struck between Buffett and Swiss Re just over a year ago, when the billionaire investor’s fund took a 3 percent stake in the insurer and 20 percent of its property and casualty reinsurance business.
($1=1.156 Swiss francs)
(Reporting by Sven Egenter and Emma Thomasson; Editing by Greg Mahlich)
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