Assicurazioni Generali CEO Mario Greco to Step Down -- Upate

By Giovanni Legorano and John Letzing

MILAN--Mario Greco is leaving the top job at Assicurazioni Generali SpA to return to a troubled Zurich Insurance Group AG as its new chief executive.

Mr. Greco, who is credited with a successful turnaround of the Italian insurer, will face a number of challenges at Zurich Insurance. Chief among them is revamping the general insurance unit that he oversaw as the business's CEO for two years, before departing for Generali in 2012.

In a statement, Zurich Insurance said Mr. Greco will become the Swiss insurance giant's CEO effective in May. That follows the departure last month of former CEO Martin Senn. Mr. Senn's tenure included a failed bid to acquire U.K.-based RSA Insurance Group PLC, and a deterioration of results for the general insurance business--Zurich Insurance's largest unit.

Tom de Swaan, the Zurich Insurance chairman who has been filling in as CEO on an interim basis, said in a statement that, "Mario offers the rare combination of entrepreneurial spirit, deep industry knowledge and proven CEO experience that anchored our search for Zurich's next leader."

Mr. de Swaan noted that Mr. Greco brings with him "an intimate understanding of our company."

Mr. Greco's board at Generali had pressed for him to stay, according to a person familiar with the matter. During his time as CEO he embarked on a strategy that involved shedding assets, exiting from loss-making investments in Italian companies, and refocusing Generali on insurance. He sold part of the company's stake in Banca Generali, a reinsurance business in the U.S., and Generali's Switzerland-based private bank, BSI SA.

The moves helped to improve Generali's capital position, which had been a major concern for shareholders. Shares of Generali gained 50% in value during his tenure, and the company paid higher dividends.

Generali hasn't yet found Mr. Greco's replacement, according to people familiar with the matter.

At Zurich Insurance, Mr. Greco will be confronted with a general insurance business that posted an operating loss for the third quarter, and is expected to again post an operating loss for the fourth quarter.

For insurers generally, financial markets in recent years have made it difficult to earn attractive investment returns. In response, the industry has seen a spate of mergers of late, as firms seek to gain heft and shed costs. But last year, Zurich Insurance missed out on its own bid to make a significant acquisition.

In July, the company unveiled plans to acquire RSA in a deal potentially valued at more than $8 billion. But continued difficulties at the general insurance business caused Zurich Insurance to call off its attempt to buy RSA in September. Zurich Insurance said at that time that it needed to focus instead on revamping the general insurance unit.

When Mr. Senn stepped aside last month, he cited the failed RSA bid as one of the reasons for his decision to leave.

Earlier this month, Zurich Insurance issued a profit warning for its general insurance unit, for the fourth quarter. The company cited an estimated $275 million in losses stemming from the recent storms in the U.K. and Ireland.

Zurich Insurance is expected to report financial results on Feb. 11.

Write to Giovanni Legorano at giovanni.legorano@wsj.com and John Letzing at john.letzing@wsj.com

(END) Dow Jones Newswires

January 26, 2016 15:09 ET (20:09 GMT)

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