Swiss Re lines up UBS CEO Ermotti to become chairman in 2021

Swiss Re lines up UBS CEO Ermotti to become chairman in 2021

Swiss Re plans to make UBS Group Chief Executive Sergio Ermotti its chairman from next year, the world's second-biggest reinsurer said on Tuesday, turning to a financial industry veteran with scant insurance experience.

FILE PHOTO: CEO Ermotti of Swiss bank UBS attends the annual shareholder meeting in Basel
FILE PHOTO: CEO Sergio Ermotti of Swiss bank UBS gestures as he attends the company's annual shareholder meeting in Basel, Switzerland May 2, 2019. REUTERS/Arnd Wiegmann

ZURICH: Swiss Re plans to make UBS Group Chief Executive Sergio Ermotti its chairman from next year, the world's second-biggest reinsurer said on Tuesday, turning to a financial industry veteran with scant insurance experience.

Swiss Re has nominated Ermotti, who is due to step down from Switzerland's biggest bank in November, for a board seat at next month's annual meeting. He would then replace Walter Kielholz as chairman from 2021, the company said.

Reuters had reported the plan on Monday.

Swiss Re shares opened 2.6per cent higher.

UBS last month named ING Chief Executive Ralph Hamers to succeed Ermotti as CEO of the world's largest wealth manager after a handover period starting in September.

Ermotti, who has led UBS since 2011, had been coy about his future career path. When news of Hamers' appointment emerged, he declined to speculate whether he would eventually replace UBS Chairman Axel Weber, who intends to stay in his post until 2022.

Ermotti is a former investment banker and stock trader who turns 60 in May. He earned plaudits for helping rebuild UBS after the financial crisis, with a focus on wealth management.

However, UBS missed its profit and cost targets for 2019 amid ultra-low interest rates in Europe and increased competition from U.S. rivals, forcing Ermotti to dial back some of the bank's financial goals.

Swiss Re, led by CEO Christian Mumenthaler, generated a smaller-than-expected 2019 profit amid claims for a series of man-made and natural disasters and expenses for its U.S. casualty business. Net profit was US$727 million.

Kielholz has been chairman of Swiss Re since 2009.

"As a company centered around knowledge and risk expertise, Swiss Re is a truly inspirational financial institution," Ermotti said in a statement.

"I look forward to working together with the board and the management team to take the company into the next successful chapter of its history."

Ermotti's switch to Swiss Re continues a changing of the guard in the Swiss financial elite.

Credit Suisse last month named Thomas Gottstein as CEO to take over from Tidjane Thiam, who resigned following a spying scandal.

Former UBS investment banking head Andrea Orcel was supposed to become chief executive of Banco Santander, but the plan fell apart in a row over pay.

(Additional reporting by John Revill; editing by Silke Koltrowitz and Mark Potter)

Source: Reuters

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