Zurich: Revolving doors spin again at Swiss insurer as chief executive decides to walk out

Martin Senn said his time at the group had been ‘very intense’

The outgoing chief executive Martin Senn said his time at Zurich had been ‘very intense’ (EPA)

The boardroom drama at Swiss insurer Zurich has taken another twist after chief executive Martin Senn decided to walk out of the struggling business, leaving his chairman in charge.

The 58-year-old will officially leave at the end of this month, with current chairman Tom de Swaan stepping in as interim chief executive while the board looks outside the company for a replacement.

The move is the latest shock at a company that has defied its traditionally dull image in recent years with tales of boardroom power politics and aggressive merger and acquisition bids.

Mr Senn, who spent 10 years at the group, and six as chief executive, hinted at the turmoil by describing his time at Zurich as “very intense”.

“There have been some setbacks in recent months, but I am convinced that we have put in place the right measures for Zurich to reach its targets,” he said.

His departure comes in the wake of other senior exits. General insurance boss Mike Kerner, who spent 33 years at the company, left last month citing “personal reasons”. The boss of Zurich’s global corporate business, Daniel Riordan, also quit.

The management shake-up follows a traumatic year for the group in an industry facing harsher regulations and lower returns. Zurich has failed to keep pace with rivals and its shares have slumped 11 per cent in the past year.

It was forced to pulled the plug on a £5.6bn takeover bid for British rival Royal & SunAlliance in September – a move described by one analyst as the “straw which broke the camel’s back”.

The change of heart was prompted by Zurich’s poor health – despite a strong balance sheet – with third-quarter results last month showing operating profits down 79 per cent due to a blast in the Chinese city of Tianjin, costing the insurer $275m (£180m). A further $300m was lost due to US car insurance claims.

The company has also tried to overhaul its corporate culture to become more competitive, with tragic consequences. Two years ago it was rocked by the suicide of its well-liked chief financial officer Pierre Wauthier. The former chairman Josef Ackermann, who joined Zurich in 2012, quit after he was named in Wauthier’s suicide note.

The former Deutsche Bank chief executive had tried to embed a more aggressive attitude at the sedate Swiss insurer and import some of the tactics used in investment banking.

Mr Ackermann was cleared of any responsibility for the death after an internal inquiry, but Wauthier’s widow, Fabienne, confronted Mr Senn and Mr de Swaan at the insurer’s annual meeting in 2014 and said she had no faith in the report.

Mr Senn is a banker by background, having risen through the ranks at Credit Suisse. He is married to a former concert violinist from Korea and is a classical music buff, sitting on the board of the Lucerne Festival. He is also one of Switzerland’s highest-paid bosses, earning SwFr 7.6m (£4.9m) last year.

Despite the crisis in confidence about the company’s culture and strategy, Mr de Swaan showed no signs of addressing the issue in a conference call. He said the board had “chosen to focus on external candidates” in finding Mr Senn’s successor – hinting at a lack of obvious leadership talent in the upper echelons of the company.

Mr de Swaan said Zurich was looking for “entrepreneurial leaders” to take the helm, opening the door for another chapter in the management saga.