ZURICH (Reuters) - By rolling out television, print and billboard marketing campaigns on Monday, Zurich Insurance ZURN.VX is aiming to advertise business as usual after a suicide and resignation in the Swiss insurer’s top ranks.
But behind the scenes, Chief Executive Martin Senn is working to regroup before results, repair shareholder confidence, and update investors on three-year targets, all while the firm puts its corporate culture under the microscope.
As a December 5 deadline creeps closer for updating investors on targets the company will likely miss, the spotlight is on how Senn will pilot the company after the suicide of its finance chief Pierre Wauthier last month and the subsequent resignation of its chairman Josef Ackermann days later.
Ackermann, a former Deutsche Bank (DBKGn.DE) CEO, was named in a suicide note. Zurich’s board is looking into whether any undue strain was placed on Wauthier and into the insurer’s wider corporate culture and behaviour.
Senn, who became CEO in 2010, reached the rank of first lieutenant in the Swiss army - a training which Ackermann, who also has a military background, said in a 2002 interview provided better preparation for overcoming crises and competition than business school.
Now the 56-year-old Senn must reassure employees and investors and replenish the top ranks at Zurich.
“Expectations of him are very high,” said Dominik Studer, an analyst at J. Safra Sarasin who has a neutral rating on the stock.
“He’s firmly in the saddle, but at the moment he has to cope with some demanding tasks,” Studer said, citing the update of the earnings targets for Zurich’s U.S. unit Farmers and non-life, as well as finding a new CFO.
Zurich said in August that meeting three-year performance targets, which include profitability and costs, for its general insurance and U.S. segment Farmers would be “challenging”.
Wauthier and Ackermann had differed over how to communicate the likelihood of Zurich missing the targets to shareholders in its second-quarter results.
Tom de Swaan, whose first move as acting chairman had been to launch the review into pressures on Wauthier, was appointed chairman on Wednesday.
Any external review would likely call on a well-known name to undertake a forensic examination by poring over emails, minutes from meetings and other documents, as well as interviewing employees, people with knowledge of similar reviews told Reuters.
“(The review) will take as long as is necessary to clear up the circumstances so there is no end date planned as of now,” a spokesman for Zurich said, adding the company would not share details on possible external advisors or the process and scope of the review.
Since Ackermann became chairman in March 2012, several top-level managers have left Zurich, giving rise to talk of a brain drain, sources inside the company say.
Former general insurance chief Mario Greco left a year ago to become head of Italian insurer Generali (GASI.MI). The head of Zurich’s life insurance arm, Kevin Hogan, quit to join AIG (AIG.N) in August, the same month Zurich’s chief of staff Ann Haugh left after just a year in the role.
Senn, a former banker at Credit Suisse who, according to Swiss magazine Bilanz, was recruited by Ackermann, has become the lone figurehead in the weeks following the suicide and Ackermann’s exit, battling to calm both investors and employees.
In an interview with Swiss newspaper NZZ am Sonntag the weekend after Ackermann’s resignation, Senn said he was working to blow away the “clouds” over the company and restore its reputation.
Entitled “for those who truly love”, Zurich’s advertising campaign is set to be rolled out in Switzerland this week. Zurich declined to give details of the cost of the campaign.
Its launch was delayed after Wauthier was found dead at his lakeside home outside Zurich on August 26, three sources told Reuters.
The campaign, which has been in development since the start of the year, will mark a move back to normality, a Zurich spokesman said.
But within the company, Senn has been sending employees daily messages of reassurance by email, entreating them not to speculate on recent events, a source told Reuters, a request he also made when addressing mourners at Wauthier’s company memorial service.
In his first public comments since resigning from Zurich’s board, Ackermann said it was unfair to blame him for what he called a surprise tragedy.
The company is due to release third-quarter results on November 14.
Additional reporting by Katharina Bart and Oliver Hirt; Editing by Ruth Pitchford