(Updates with analyst comment in fourth paragraph.)
Dec. 12 (Bloomberg) -- Swiss Re Ltd., the world’s second- largest reinsurer, said Chief Executive Officer Stefan Lippe has decided to retire early and will step down next year.
A successor to Lippe, 56, who was appointed CEO in 2009 after losses prompted Jacques Aigrain’s ouster, will be named “soon,” the Zurich-based company said today in an e-mailed statement.
Under Lippe’s leadership, the company repaid a loan from Warren Buffett’s Berkshire Hathaway Inc. and regained its AA- credit rating with Standard & Poor’s. Swiss Re last month reported third-quarter net income more than doubled to $1.35 billion amid fewer natural-disaster claims, higher property-and- casualty premiums and gains on its bond holdings.
This decision “came earlier than expected,” Stefan Schuermann, a Zurich-based analyst with Vontobel, said in a note to investors. “Swiss Re has a broad management board and a smooth succession toward a new CEO should be no problem.”
Swiss Re shares fell as much as 1.7 percent. They were down 0.8 percent to 49.08 Swiss francs at 9:30 a.m. in Zurich trading, valuing the company at 18.2 billion francs ($19.6 billion).
“We certainly have good candidates internally, but will also look outside of the company to keep all options open,” said Rolf Tanner, a Zurich-based spokesman for the reinsurer.
Lippe had been with the company for almost three decades. He refocused Swiss Re on underwriting after Aigrain’s strategy of trading securities led to more than $8 billion of writedowns and losses, and created a new holding company for the reinsurance business this year. A week after Lippe took the top job in February 2009, the company tapped Berkshire for 3 billion francs of capital.
Candidates to succeed Lippe may include Christian Mumenthaler, who was named CEO of the reinsurance business in October, according to Fabrizio Croce, a Zurich-based analyst with Kepler Capital Markets. Mumenthaler is responsible for strategy, financial results and asset allocation at the unit, which accounts for about 80 percent of Swiss Re’s business.
“The lead time should be sufficient to allow for a smooth transition,” Lippe, who said he decided to step down over the weekend, said in the statement. “Now that the turnaround has been achieved, a new era begins for Swiss Re with a new corporate structure and refined strategy. This was the right moment for me to choose to inform the board about my intention to retire early.”
Swiss Re said last month that Chief Underwriting Officer Brian Gray will retire early on April 30 next year to return to Canada. Swiss Re wants to announce his successor in the first quarter of next year. Chief Economist Thomas Hess retires at the end of the month.
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