Swiss Reinsurance Co. replaced CEO Jacques Aigrain after record losses wiped out more than a third of its market value in a week and forced the second-biggest reinsurer to turn to Warren Buffett for capital. The board of directors accepted Aigrain's offer to resign and named deputy CEO Stefan Lippe as his successor, Swiss Re said in a statement today from Zurich.
The announcement came a week after the reinsurer issued the profit warning, announced it would get a capital injection of 3 billion francs ($2.6 billion) from US investor Warren Buffett's company and was looking for another 2 billion francs on the capital markets. (See: Warren Buffett invests $2.6 billion in Swiss Re)
The reinsurer's write-downs, which led to a 1 billion franc loss in 2008, stem from its expansion beyond reinsurance into trading credit default swaps and other riskier operations. Swiss Re, which became the world's biggest reinsurer after buying GE Insurance Solutions in 2005, now has less than a quarter of the market value of rival Munich Re.
The group has already said it will close down the divisions responsible for its losses, while Aigrain said Thursday that the new CEO Lippe "has been the architect of Swiss Re's focus on disciplined, quality underwriting in the reinsurance business."
"Stefan Lippe brings hands-on expertise, a clear strategic focus and a reputation for delivery of bottom-line results," said Peter Forstmoser, chairman of the board. Forstmoser said that under Aigrain's leadership Swiss Re had made several major acquisitions, including the Insurance Solutions operations from General Electric.
Lippe, a German national, has been with Swiss Re for 25 years. He joined the executive board in 1995 and led Swiss Re's property and casualty and life and health underwriting since 2005. He became chief operating officer in September 2008. ''I am clear about the challenges that Swiss Re needs to address,'' HE said in the statement. ''Our core reinsurance portfolio is sound.''