Uncertainty over whether Mario Greco will stay on as chief executive of Generali rattled investors in Italy’s top insurer on Monday after a Swiss newspaper reported rival Zurich Insurance was set to poach him.
Speculation that Greco, who ran the Swiss group’s insurance business for five years before joining Generali in August 2012, could return to Zurich has been bubbling for a month.
This intensified after Switzerland’s SonntagsZeitung reported on Sunday that Zurich would appoint Greco as its chief executive by early February.
Brokers said that if confirmed, it would deal a serious blow to Generali, where Greco is widely seen as the architect of a rapid turnaround that has nearly doubled its share value.
At 1445 GMT Generali’s shares were down 2 percent, while Zurich’s stock was up 3.9 percent.
Zurich is seeking to hire a new CEO from among external candidates after Martin Senn quit the Swiss group on Dec. 1 following a failed takeover bid for Britain’s RSA.
The Swiss insurer declined to comment. It was not immediately possible to reach Greco for comment.
A source close to Generali told Reuters that Greco, whose mandate expires in April, was in talks to renew his contract.
A source close to the insurer’s shareholders confirmed the contract discussions but said: “if Greco wants to leave, it is his decision.”
This source said Generali was not envisaging sweetening Greco’s pay package to stop him from leaving. Greco earned 3.25 million euros in 2014.
A third source said Generali was ready to give Greco another three-year mandate but he was looking for a six-year extension.
“Mr Greco was able to reshape Generali in the last three years, also avoiding a capital increase. His resignation, in the middle of the new strategic plan, would be negative news for Generali,” Banca Akros said in a note.
It added however that it believed Generali would eventually persuade Greco to stay.
The SonntagsZeitung report said Greco’s appointment at Zurich had not been formally approved and a last-minute change could not be ruled out.
Zurich is due to report annual results on Feb. 11.
Greco took the helm at Generali, Europe’s No 3 insurer, at the height of the eurozone debt crisis after a boardroom coup ousted his predecessor. Under his stewardship, Generali has sold 4 billion euros worth of assets, cut costs and bolstered capital ahead of new, tougher European solvency rules.
Senn had faced mounting pressure to boost performance at Zurich’s general insurance business. In November, Zurich posted a 79 percent drop in quarterly net profit hurt by losses stemming from a fire at the Chinese port of Tianjin.
Chairman Tom de Swaan has taken temporary charge of the company until Senn’s successor is appointed.
(Additional reporting by Zurich newsroom; writing by Silvia Aloisi and Stephen Jewkes; editing by Jason Neely and Alexander Smith)