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Swiss Re CEO to step down

Swiss Re CEO Stefan Lippe will take early retirement in 2012 as the reinsurer starts the search for his successor, the company announced today (12 December).

Lippe steps down after three years leading the company through a crucial transformation phase after the financial crisis.

Chairman Walter Kielholz said the firm would ensure there was a smooth transition to the new leader taking over.

He noted the board's regret at Lippe's decision and praised his role in pulling up Swiss Re's performance over the past few years.

"Under his leadership we have restored our capital strength, repaid the convertible capital instrument to Berkshire Hathaway, regained the AA- rating with Standard & Poor's and improved premiums earned as well as net income significantly," Kielholz said.

Lippe has spent nearly 30 years at Swiss Re, taking the helm in 2009.

He said the time was right for him to announce his plan to retire early, now that the firm had delivered on the targets it set to recover from the 2008 crisis.

"Now that the turnaround has been achieved, a new era begins for Swiss Re with a new corporate structure and refined strategy," he said.

The reinsurer lost its AA- rating in 2009 after it took punishing losses from investing in and underwriting structured credit products, forcing it to turn to Warren Buffett's Berkshire Hathaway for a SwFr3bn capital injection.

But the firm repaid Berkshire Hathaway early at the end of 2010 and won its AA- rating back this October. Standard & Poor's said the firm was on track to post a strong 2011 profit despite this year's catastrophe losses.

Analysts say Swiss Re is well positioned to take advantage of rising reinsurance rates in 2012 with a $6bn capital buffer over that required for an AA rating.

UBS analyst Kathy Fear predicted in a recent note that the firm could put to work an additional $500mn of capital next year as it had both the capacity and appetite to take on more catastrophe risk where price increases are concentrated.

She also underlined other options the reinsurer has to enhance returns, including letting its 20 percent whole account quota share with Berkshire Hathaway lapse after it expires at the end of 2012.

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