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Swiss Life hands reins to new boss

Swiss Life chairman, Andres Leuenberger (right) is pinning his hopes on Rolf Dörig

(Keystone)

The troubled insurer Swiss Life has appointed banker, Rolf Dörig, as its new CEO, after ousting Roland Chlapowski amid a scandal over secretive management perks.

The scandal has also claimed the scalp of a political party boss, who is on the board of Swiss Life.

Swiss Life said Chlapowski's departure was essential to restore the confidence of investors and customers, following the scandal surrounding a secretive investment vehicle for top managers and recent accounting errors.

Reeling from the scandal and two embarrassing accounting errors, Swiss Life appointed former Credit Suisse Group manager, Rolf Dörig, as its new CEO with immediate effect.

Chlapowski is the second CEO in nine months to have been shown the door by Swiss Life. The previous incumbent Manfred Zobl left the company in February.

Confidence dented

Speaking to swissinfo, Dörig said his priority was "to rebuild trust with our customers, the public and our employees".

The view was echoed by Andres Leuenberger, chairman of the board of directors. "It is vital to reinforce customers' and investors' faith in Swiss Life/Rentenanstalt again, and quickly, as well as the confidence of the authorities and the general public," he said.

The scandal also cost Gerold Bührer his job as president of the Radical party. He is not directly implicated in the LTS scandal, but sits on the board of Swiss Life.

No other changes

Leuenberger ruled out further resignations for the time being.
"We discussed this intensely but we came to the conclusion that it would be the wrong time now," he told swissinfo.

"This company has to have a steady board and the new CEO has to have the support of the board and it would be the wrong decision now just to leave the chaos behind.

"There will be changes in the board at the next general meeting in May of next year. Some people will retire and we will reinforce this board with good people in the financial service industry."

Capital increase

The insurer also signalled that next week's planned capital increase of between SFr900 million and SFr1.2 billion ($816 million) was still on track, despite Chlapowski's resignation.

"Preparations for the capital increase continue as planned," said a spokesman.

The resignation follows heavy media speculation that Chlapowski would be among a handful of top Swiss Life bosses likely to resign.

But at a press conference on Wednesday, Swiss Life announced that the board of directors would remain unchanged for the time being.

Switzerland's largest life insurer revealed last week that six top managers - including Chlapowski - made a combined profit of SFr11.5 million ($7.8 million) by investing their own money in Long Term Strategy AG (LTS), a three-year-old company with close ties to the insurer.

Chlapowski personally enjoyed a return of SFr3.2 million on an investment of SFr967,000

The existence of LTS had reportedly been kept secret not only from regulators and shareholders, but also from some other members of the board.

Loss of confidence

"The board of directors is aware that confidence has been lost, partly because of the accounting errors but also because of the debate over LTS Ltd," added Leuenberger.

Last weekend the Swiss economics minister, Pascal Couchepin, added his voice to the criticism of top managers who enrich themselves at shareholders' expense, in a newspaper interview with the "SonntagsBlick".

Although he did not mention anyone by name, Couchepin's comments - describing "greedy bosses" as a "disgrace" - appeared shortly after Swiss Life admitted its top managers had made fat profits out of LTS.

LTS's activities were terminated after Leuenberger ordered its dissolution earlier this year.

Leuenberger said he had known about LTS since 2000 but had not invested in the company. He explained that he had only acted after the insurer's own financial problems became apparent.

Investigation

The Federal Office of Private Insurance recently announced it is investigating two accounting errors at Swiss Life, which wiped more than SFr450 million off the insurer's bottom line.

Chlapowski and Leuenberger have been summoned to Bern to give further explanations about LTS to the Federal Office of Private Insurance.

Analysts indicated on Wednesday that Chlapowski's departure was unlikely to disperse all the clouds hovering over next week's planned capital increase.

They fear an interim report by federal investigators, which is expected to be released shortly, may yet add to Swiss Life's woes.

"I think they will muddle through and finally get money, but this won't be without difficulties," said Claude Zehnder, market analyst at Zurich Cantonal Bank.

Swiss Life is looking to cut 700 jobs, including 500 in Switzerland.

swissinfo with agencies

Swiss Life

Chlapowski is being replaced by Credit Suisse's Rolf Dörig.
The board of directors remains unchanged.
Swiss Life is being investigated by Zurich district prosecutors and the Federal Office of Private Insurers.
The scandal claimed the scalp of Radical party boss, Gerold Bührer, who remains a Swiss Life board member.

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