(Bloomberg) — As Zurich Insurance Group AG begins the search fora chief executive officer, investors may need to prepare for morethan a new face. An end to the company's generous dividends couldalso be on the horizon.

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Switzerland's biggest insurer said it is looking for an“entrepreneurial” outsider with deep experience in the industry toreplace Martin Senn, who stepped down Tuesday after sixyears as CEO. Chairman Tom de Swaan will fill in until a successorcan be found.

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One of the new CEO's first challenges will be to boost income.After two years of growth barely above zero, Zurich expects anoutright decline in revenue this year.

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Shareholders have called for a change in strategy, and Zurichresponded by announcing cost cuts and layoffs earlier this year.Still, generating more revenue remains a tall order with prices forinsurance coverage under pressure and low interest rates holdingdown returns from investments.

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The new CEO will have to “review an overly optimistic dividendpolicy or clearly demonstrate a new strategy to improve cash flowsin a challenging environment,” said Stefan Schuermann, an analystat Vontobel in Zurich. While this year's payout appears safe, “themid-term outlook in this regards appears less certain,” hesaid.

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De Swaan said in a call with journalists Tuesday that thecompany isn't planning to change its policy of paying “asustainable and attractive dividend.”

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Under Senn, Zurich has maintained a dividend of 17 Swiss francsper share for the past five years and plans to do so again for thisyear. That works out to about 6.3% of Zurich's share price, thehighest yield in the Swiss Market Index of the country's 20 leadingcompanies, according to data compiled by Bloomberg.

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Spare capital

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The new CEO will have some ammunition in the form of $3 billionin excess capital. Zurich would prefer to spend it on internalgrowth but an acquisition is another possibility, according to deSwaan. The company could also return the money to shareholders— a less desirable option, he said. Zurich said it wouldelaborate on plans for the money in February, when it presents itsfull-year results.

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“If you continuously signal very high dividends you may depriveyourself of strategic possibilities,” said Daniel Haeuselmann, whohelps manage almost 120 billion Swiss francs at GAM Holding,including Zurich shares. “I would expect the company to continuedeveloping globally, to go into new markets and most importantly tocontinue growing. I don't just want a high dividend but a growingdividend.”

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Last month, the company posted a 79% drop in third- quarterprofit after booking $275 million in losses from the Tianjindisaster and setting aside $367 million in reserves to cover mainlyNorth American auto and construction liabilities. That led to a$183 million operating loss in general insurance and promptedZurich to abandon its offer for RSA Insurance GroupPlc.

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Zurich is now revamping its non-life insurance business under aplan that includes job cuts and an exit from some businesses. Thecompany said it will still reach its targets through 2016.

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