Greco elected after Generali coup ousts Perissinotto

Sat Jun 2, 2012 11:07am EDT
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By Gianluca Semeraro and Paola Arosio

MILAN (Reuters) - Europe's third-largest insurer Generali (GASI.MI: Quote) said it named Mario Greco, a top executive at Zurich Insurance Group ZURN.VX, as its new CEO on Saturday, after Giovanni Perissinotto was ousted in a rapid boardroom coup.

The push to oust Perissonotto -- who spent more than 30 years at the group - happened suddenly last week and was led by chief shareholder Mediobanca (MDBI.MI: Quote) and private investors including Luxottica (LUX.MI: Quote) founder Leonardo Del Vecchio.

While Generali shares have traditionally ranked alongside Italian government bonds in terms of investment safety, Europe's debt crisis has dramatically slashed the value of Mediobanca and Luxottica's Generali stakes, piling pressure on the group's management to take action to improve the share price.

By picking Greco, the insurer has broken with a long-standing practice of tapping internal management.

Nor is Greco a manager who can be considered "near to" Mediobanca or other key shareholders. His ten-year stint at Italy's second-largest insurer RAS from 1995 to 2005 propelled him to the ranks of Europe's most successful risk managers. His recent tenure at Zurich Insurance Group has kept him away from the fray of Italian finance.

Greco, however, will face an uphill climb in his mandate to boost the insurer's underperforming share price since, its shares mirror the insurer's 46 billion euros ($57 billion) exposure to Italian government bonds.

Plus, Generali may face a looming capital increase, since it is on the hook to spend about 2.5 billion euros by 2014 to buy up a 50 percent stake in Generali PPF Holding, a joint venture operating in 13 countries is Eastern Europe.

Generali Chairman Gabriele Galateri will take over as acting CEO until Greco can join the group, Generali said in a statement after the board meeting. The decision was taken in just under four hours, in an atmosphere which independent board member Claudio De Conto described as "civil." Perissinotto left without comment, speeding away in a chauffer-driven Audi. He will remain on the board.   Continued...

A view of Generali headquarters in Rome. April 6, 2011. REUTERS/Remo Casilli