Zurich Financial Eyes New CEO; Schiro Retires Year-End
January 29 2009 - 4:26AM
Dow Jones News
Zurich Financial Services AG (ZURN.VX) Thursday said it is
searching for a new chief executive to replace James Schiro, who
will step down at the end of this year after seven years at the
helm of the Swiss insurer.
Schiro, who will retire from the Zurich-based company just shy
of his 64th birthday, ushered in a period of sobriety and
conservatism after forays into more sophisticated financial
products that ultimately led to heavy reserving.
Schiro leaves Zurich as intense turmoil hits the insurance
industry and some rivals have to be propped up by their
governments.
In the U.S., American International Group Inc. (AIG) is selling
off assets, including the third-party management business, to repay
a loan of as much as $60 billion from the federal government. AIG
was rescued by the government last year as it faced a possible
bankruptcy filing.
With no obvious candidate to succeed Schiro among Zurich's
11-person top management board, the company is likely to be looking
in- and outside of the firm for successors, Vontobel analyst Stefan
Schuermann said. Vontobel rates the stock at hold with a CHF260
target.
A spokeswoman for Zurich declined to comment on the search for a
new CEO to replace Schiro, who has won respect from analysts and
investors for turning around a company that in 2002 needed some 2
billion Swiss francs ($1.74 billion) to renew its balance
sheet.
"James Schiro has achieved a remarkable strategic and financial
turnaround at Zurich Financial Services, and the firm of today is
one of the most profitable insurers worldwide," Bank Sarasin
analyst Rainer Skierka wrote in a note to investors. He rates the
stock at buy.
Skierka also lauded Zurich for managing the financial crisis
"very well" and avoiding some of the traps rivals such as AIG
haven't.
In November, when the insurer posted a 90% drop in third-quarter
net profit while lifting mid-term efficiency targets, Schiro vowed
to keep focusing on financial discipline when eyeing acquisition
opportunities.
Schiro, who became CEO in 2002 shortly after joining Zurich as
chief operating officer, is leaving at the customary retirement age
for Zurich's top executives, which is 63 at the latest.
Schiro was at the World Economic Forum in Davos and wasn't
immediately reachable for comment.
Zurich's shares fell in early trading, amid a drop in the
broader sector. At 0832 GMT, the stock was down CHF3, or 1.4%, at
CHF216, with the Dow Jones Stoxx insurance index off 1.2%.
Company Web Site: http://www.zurich.com
-By Katharina Bart, Dow Jones Newswires; +41 43 443 8043;
katharina.bart@dowjones.com
(Martin Gelnar contributed to this story.)
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