Zurich Financial Eyes New CEO; Schiro Retires Year-End

Zurich Financial Services AG (ZURN.VX) Thursday said it is searching for a new chief executive to replace James Schiro, who will step down at the end of this year after seven years at the helm of the Swiss insurer.

Schiro, who will retire from the Zurich-based company just shy of his 64th birthday, ushered in a period of sobriety and conservatism after forays into more sophisticated financial products that ultimately led to heavy reserving.

Schiro leaves Zurich as intense turmoil hits the insurance industry and some rivals have to be propped up by their governments.

In the U.S., American International Group Inc. (AIG) is selling off assets, including the third-party management business, to repay a loan of as much as $60 billion from the federal government. AIG was rescued by the government last year as it faced a possible bankruptcy filing.

With no obvious candidate to succeed Schiro among Zurich's 11-person top management board, the company is likely to be looking in- and outside of the firm for successors, Vontobel analyst Stefan Schuermann said. Vontobel rates the stock at hold with a CHF260 target.

A spokeswoman for Zurich declined to comment on the search for a new CEO to replace Schiro, who has won respect from analysts and investors for turning around a company that in 2002 needed some 2 billion Swiss francs ($1.74 billion) to renew its balance sheet.

"James Schiro has achieved a remarkable strategic and financial turnaround at Zurich Financial Services, and the firm of today is one of the most profitable insurers worldwide," Bank Sarasin analyst Rainer Skierka wrote in a note to investors. He rates the stock at buy.

Skierka also lauded Zurich for managing the financial crisis "very well" and avoiding some of the traps rivals such as AIG haven't.

In November, when the insurer posted a 90% drop in third-quarter net profit while lifting mid-term efficiency targets, Schiro vowed to keep focusing on financial discipline when eyeing acquisition opportunities.

Schiro, who became CEO in 2002 shortly after joining Zurich as chief operating officer, is leaving at the customary retirement age for Zurich's top executives, which is 63 at the latest.

Schiro was at the World Economic Forum in Davos and wasn't immediately reachable for comment.

Zurich's shares fell in early trading, amid a drop in the broader sector. At 0832 GMT, the stock was down CHF3, or 1.4%, at CHF216, with the Dow Jones Stoxx insurance index off 1.2%.

Company Web Site: http://www.zurich.com

-By Katharina Bart, Dow Jones Newswires; [phone]; [e-mail]

(Martin Gelnar contributed to this story.)

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