ZURICH, (Reuters)—Swiss Re said Chief Executive Stefan Lippe will take early retirement after roughly three years at the helm in a surprise move which analysts said added a new element of uncertainty to a company Lippe had helped stabilize.
No reason was given for the departure, which Swiss Re said would take effect on an as-yet undetermined date next year. Some analysts saw reinsurance chief Christian Mumenthaler as likely successor, but Swiss Re said it would look at outside as well as internal candidates for the position.
The 56-year-old Lippe informed the Zurich-based insurer's board over the weekend of his decision, a Swiss Re spokesman said on Monday. In a statement, Lippe cited the turnaround of the Zurich-based reinsurer as the appropriate time to step down.
"The board of directors very much regrets Stefan Lippe's decision to retire early after almost three decades at Swiss Re," Swiss Re Chairman Walter Kielholz said in a statement.
A successor will be appointed "soon", Swiss Re said.
Analysts said the departure added a note of uncertainty at Swiss Re after Lippe ushered in an era of greater stability following a push to take more risk under his predecessor, investment banker Jacques Aigrain.
"Lippe's leaving is a surprise and investors won't be jumping for joy over it," said Bank Sarasin analyst Martin Schwab, who has a "buy" rating on the stock.
PRIZE RATING
Lippe's main achievement was steadying the position of Swiss Re, which lost its prized AA rating in 2009 after risky investments jeopardized its capital base.
This prompted an emergency 3 billion Swiss franc ($3.3 billion) loan from U.S. billionaire Warren Buffett's Berkshire Hathaway Inc.
Swiss Re repaid the Buffett loan late last year and in October won backing from ratings agency Standard & Poor's, which lifted the reinsurer to AA- with a stable outlook from A+.
Swiss Re said earlier this year its goal was to further improve its rating, expand its business, then return cash to shareholders. Swiss Re paid out 2.75 francs a share in 2010, up from 1 franc in 2009.
As attention shifts to candidates to replace Lippe, Kepler Capital markets analyst Fabrizio Croce said Swiss Re's Christian Mumenthaler, promoted to head of reinsurance in October, is likely to get the nod at the company, which he also saw shedding non-core operations.
"As a next step, we expect the company to lay off or run off Admin Re and Corporate Solutions and focus on core competence reinsurance by promoting Mumenthaler as new CEO," Croce said, who has a "hold" on the stock.
"In our view, the appointment of Mumenthaler as new CEO would be highly beneficial to the company, he said.
Mumenthaler wasn't immediately available for comment.
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