Equity Analyst Says Zurich Financial CFO’s Departure a ‘Surprise’

Dieter Wemmer, Zurich Financial Services Group's chief financial officer and regional chairman of Europe, will leave the group by the end of the year, a move one equity analyst termed a "surprise" that may be viewed negatively by the market in the short term.

Wemmer, 54, who had been with Zurich for 25 years, is leaving "to pursue opportunities outside of Zurich," the group said. He will remain in both his roles until a successor is chosen, "to ensure a smooth transition," Zurich said.

London-based equity analyst Michael Klien of Nomura International plc said in a research note that Wemmer's departure "comes as a surprise to us and will likely be taken negatively at first by the market, as he was well regarded." But Klien added Zurich's fundamentally strong capital position will remain unchanged, as will Nomura's "buy" rating on the group's stock.

Zurich Financial's shares were trading at 207.8 Swiss francs(US$249.3) a share on the Swiss Stock Exchange at midday local time on June 29, up 1.17% from the previous close.

"In our view, Dieter Wemmer leaves a company that enjoys a comfortable capital position, amongst the best of the larger European insurers," Klien wrote. "With strong middle management and capable successors from which to choose, Wemmer will be a loss to Zurich, but the company should be able to find a suitable successor."

Klien added that Wemmer was "well regarded" by the investment community and held a variety of industry positions, such as chairman of the CFO Forum, to which he was elected in October 2009. He is also a member of the strategy board of the European Insurance and Reinsurance Federation (CEA).

"Moreover, he was well regarded within the company and was regarded as a candidate to succeed Jim Schiro as CEO," Klien wrote.

Wemmer held a variety of positions with Zurich, including head of mergers and acquisitions from 1999 to 2003. He was appointed CFO in March 2007 and was given the added -- and newly created -- role of regional chairman of Europe in July 2010.

Zurich Financial had reported a 32% fall in first-quarter net income on Asia/Pacific catastrophe losses and the impact of sluggish economic recoveries in the United States and Europe (BestWire, May 5, 2011).

First-quarter net profit fell to US$637 million from $935 million a year earlier. Zurich reported aggregate losses of $517 million for five natural catastrophes in the Asia/Pacific region during the quarter, about what it predicted in March.

(By David Pilla, international editor, BestWeek: [email protected])