Allianz SE said Chief Executive Officer Michael Diekmann will step down next year and named board member Oliver Baete to succeed him as it grapples with upheaval at Pacific Investment Management Co.

Diekmann will stay on until Allianz’s next annual general meeting in May when Baete, 49, will take over. Chief Financial Officer Dieter Wemmer will remain until 2017, the Munich-based insurer said in a statement today, announcing a decision taken by its supervisory board.

Pimco clients pulled billions of dollars from its funds after the Sept. 26 announcement that Chief Investment Officer Bill Gross was joining Denver-based Janus Capital Group Inc. Analysts at Deutsche Bank AG were among those predicting outflows of more than $200 billion. Shares of Allianz fell the most in almost three years, wiping out 3 billion euros ($3.8 billion) of the company’s market capital. The stock has fallen 6.2 percent since.

Allianz’s management is seeking to reassure the company’s biggest investors, who include BlackRock Inc. and Deutsche Bank AG, that it can contain the damage from the abrupt departure of an industry legend who helped build Pimco into one of the world’s largest fixed-income investment managers. Moody’s Investors Service said today higher outflows at Pimco will mean lower profits forAllianz. The firm, which manages almost $2 trillion in client assets, provides a quarter of Allianz’s operating profit.

Even before Gross’s departure, Pimco was raising eyebrows among investors in Allianz. Gross’s flagship Total Return Fund has seen outflows for 17 straight months through August, among Pimco funds that have underperformed peers. In January Pimco was forced to reshuffle its management team after former CEO Mohamed El-Erian left the firm.

Pimco Commitment

Pimco is also under scrutiny from the U.S. Securities and Exchange Commission over how the firm assigned asset prices at Gross’s Pimco Total Return Exchange-Traded Fund.

Diekmann told analysts earlier this week that Allianz remains committed to Pimco, acquired in 2000. Wemmer, speaking in the same conference call, said Allianz’s full-year operating profit forecast for the year hasn’t changed. Within hours of Gross’s exit, Pimco announced that Daniel Ivascyn, one of six deputy CIOs appointed after El-Erian’s exit, will replace Gross as chief investment officer.

Apart from stabilizing Pimco, challenges for Allianz’s top managers include coping with lower returns from low interest rates. Like most insurers, Allianz has most of its investments in fixed-income such as government, corporate and covered bonds. And the company is revamping Fireman’s Fund, its property & casualty business in the U.S. that has struggled to remain profitable.

Allianz is also under pressure from investors including Union Investment in Frankfurt to pay out a higher share of its profits as dividend than the 40 percent of profit typically distributed in the past.

Diekmann has led Allianz since 2003, as the insurer posted its first annual loss since World War Two on equity writedowns and mounting bad loans at Dresdner Bank, the Frankfurt-based lender acquired in 2001. He returned the company to profit and orchestrated the emergency sale of Dresdner in August 2008, just weeks before the Lehman Brothers debacle.

Diekmann also streamlined Allianz’s holdings in other insurers by buying out minority investors. In 2006 he drew fire from employees and unions after announcing plans to cut 7,500 positions, a decision that rankled his fellow Germans as it coincided with record earnings.