Quanta Capital Holdings Ltd., which is struggling to recreate itself and to keep its A.M. Best rating at "A-minus," announced the resignation of its chief executive officer, Tobey Russ, last night.
Quanta said its board of directors has appointed Robert Lippincott III as its interim CEO, and that Mr. Lippincott will replace Mr. Russ, who resigned CEO and as a director of the company.
Last night, the board also announced that it has concluded its search for a permanent chief financial officer, appointing interim CFO Jonathan Dodd, to that position.
Mr. Dodd, whose prior experience includes stints at Allianz Risk Transfer-North America and KPMG, was named interim CFO in late July when the former CFO, John Brittain, decided to the leave.
Earlier this year, Quanta pushed Mr. Russ aside as chairman of the company also.
The shake-up at the top comes less than a month after Quanta announced that James Ritchie would take the role of non-executive chairman of the company, with Mr. Lippincott and Mr. Russ serving on an executive committee of the board.
Mr. Lippincott, former chairman and CEO of AXA Property & Casualty, had been appointed to the board in March.
Mr. Ritchie had most recently served as managing director and CFO of OneBeacon Insurance Company.
After Quanta reported an initial estimate of $42 million-to-$58 million in losses from hurricanes Katrina and Rita in early October, A.M. Best put the Bermuda-based company's "A-minus" rating under review. Reacting to the Best decision, Quanta announced it would curtail its writings in property businesses.
With a revised hurricane loss estimate of $68.5 million coming later in the month, the company reported a $59.1 million net loss on its bottom line for the third-quarter. During an earnings conference call explaining the results, Mr. Russ said that Quanta would focus on specialty lines as it discontinued writing new property business.
"We made a decision to curtail this business prior to the decision by A.M. Best," he said during the call, indicating that increases in storm frequency and severity drove the decision to curtail the $90 million book.
During the call, Mr. Russ also repeatedly responded to questions about the Best rating. He said the company was not only reducing its risk profile, but also seeking to raise capital to keep its rating.
He noted, however, that the reduced risk profile of the new business strategy would put it in an excess capital position next year, explaining that Best was basing its capital requirements on premiums written in 2005.
"We are not working on the basis that we will run this company with anything less than an 'A-minus,'" he said.
In the announcement last night, Quanta said that as a result of Mr. Lippincott's appointment as interim CEO, he is no longer considered an independent director. He is, therefore, relinquishing a position as a member of the Audit Committee, and the Governance and Nominating Committee is searching for an additional independent director, since independent directors no longer make up a majority of the board.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.