Editor's note: Updated 4:00 p.m. ET

(Bloomberg) -- Zurich Insurance Group AG hired Assicurazioni Generali SpA’s Mario Grecoas chief executive officer, giving him the task of turning aroundthe company after losses in its general insurance business forcedit to abandon a high-profile takeover.

Greco, 56, will start on May 1, the Zurich-based company said ina statement on Tuesday.

He returns to the company where he was employed for five yearsbefore joining Generali. His experience at Zurich includes stintsheading up global life as well as the non-life unit. He had beenshortlisted for the top job when Martin Senn was promoted in 2010,people with knowledge of the matter said at the time.

“His intimate understanding of our company and our industry andhis track record as a leader make him a unique candidate for therole,” Tom de Swaan, Zurich’s chairman, said in the statement.

Senn stepped down Dec. 1 after Zurich’s non-life unit posted athird-quarter loss that forced the company to abandon a takeoverbid for RSA Insurance Group Plc. Its troubles deepened later inDecember when three storms pummeled parts of England, Scotland andIreland. Thousands of homes were flooded, leading the company towarn shareholders last week that it expects a second straightquarterly loss in general insurance.

‘Market challenges’

The Swiss company, one of the world’s largest insurers withabout 55,000 employees, is counting on Greco to pull off the samefeat at Zurich that he accomplished at Generali. The Naples nativehas cut costs, reduced debt and sold non-strategic units to reviveprofit that stood at a nine-year low when he took over in 2012.

“I am honored to be asked to join Zurich at this criticaljuncture for the insurance industry,” Greco in the statement. “Thecompany has faced market challenges in recent times, but I knowthat Zurich’s strong global franchise, the breadth of talent andthe powerful brand provide all of the ingredients for our futuresuccess.”

Greco told Generali’s board that he was unable to find anagreement with the Italian company’s shareholders on his futurerole after months of discussions, according to a letter seen byBloomberg. The company needs certainty to meet its targets, and theconditions for Greco to stay on weren’t there, he said.

Dividend cuts?

A key question for investors is whether Zurich will cut itsdividend and how it will use about $2 billion in excess capitalthat it had before the latest profit warning. While Chief FinancialOfficer George Quinn has said he would prefer to spend the money onacquisitions, Zurich could also return it to shareholders.

“Mario Greco would be clearly positive for the stock,” GeorgMarti, an analyst at Zuercher Kantonalbank, said before theappointment was announced. “Greco is a doer and investors wouldtrust him to achieve a turnaround quickly.”

Related: Zurich appoints former AIG VP as chief underwritingofficer for North America

The Swiss insurer has paid out 17 francs a share every yearsince 2010 and has the highest dividend yield among Swiss stocksand European insurance companies. Critics have questioned thecompany’s ability to sustain the dividend in the face of near-zerorevenue growth over the past two years.

The company posted a 79% drop in third-quarter profit afterbooking an operating loss of $183 million in general insurance.That reflected an estimated $275 million in claims from themid-August explosions in China’s port city of Tianjin and $367million needed to plug a hole in reserves for mainly North Americanauto and construction liabilities.

The company abandoned its offer for RSA in September, saying itpreferred to get the business back in shape before pursuing furtheracquisitions. Kristof Terryn took over as CEO of the generalinsurance unit that same month, replacing Michael Kerner.

You’re invited to join us on Facebook!

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.