By Jason Rhodes
ZURICH (Reuters) - Reinsurer Swiss Re (RUKN.VX) has picked industry veteran Stefan Lippe to steer the company back to basics after his investment banker predecessor's short tenure ended in big writedowns and a full-year loss.
In a surprise announcement on Thursday, the world's second-biggest reinsurer said it was replacing Jacques Aigrain with Lippe as chief executive as it refocuses on its core business.
Analysts say Lippe, a reinsurance veteran with 25 years experience, is regarded as the only top executive untarnished by Swiss Re's foray into investment banking under the abrasive Aigran, a former JP Morgan banker, who took the helm in 2006.
Last week, Swiss Re was forced to go to U.S. investor Warren Buffett for 3 billion francs (1.8 billion pounds) of new capital and said it would disband its financial markets activities that had invested in the risky assets which forced the group to make a 6 billion franc writedown for 2008.
"He's a bit of a John Major-style character," said a company source, comparing Lippe to the former UK prime minister. "Not charismatic (but) grey and always in the background. A solid reinsurer that can guide the company to safety."
Lippe, a 53-year-old German citizen, graduated in mathematics with business administration from the University of Mannheim and gained his doctorate in 1982.
He joined Swiss Re's executive board in 1995 and became Aigrain's deputy in September 2008 after a successful spell as head of Swiss Re's property and casualty operations.The new chief executive may prove more popular with the rank and file than Aigrain, regarded as an aloof outsider to the reinsurance sector, the company source said.
"Lippe is more approachable and comes across as extremely professional," he said.
This could help Lippe to unite demoralised Swiss Re employees behind the world's second-largest reinsurer as it battles to regain profitability and shareholder confidence.
"Stefan Lippe is an ideal internal choice for the replacement. His seniority, proven track record and employees' respect should help (Swiss Re) to find success again," said Kepler Markets analyst Fabrizio Croce.
FURTHER CHANGES AFOOT?
Analysts and markets welcomed Lippe's appointment, rewarding the Swiss Re stock with gains after it fell to a 16-year low last week.
"We see this only as a first, however, important step on the senior management level to take responsibility for the strategic disorientation under the leadership of Mr Agrain," said Sarasin analyst Rainer Skierka.
"We therefore think that the market will anticipate more similar action in the near future."
This reflects the mood within parts of the company, where a sense of relief that a change of management and focus back to reinsurance is mixed with a belief more heads could roll, the company source said.
Investors' attention will now turn to the company's update and full results on February 19.
(Editing by Erica Billingham)
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