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Zurich Financial shares surge

Hüppi said he was looking forward to new challenges

(Keystone Archive)

Shares in Zurich Financial Services surged more than four per cent in trading on Monday in reaction to Friday's news that chairman Rolf Hüppi is to step down later this year.

Zurich's shares rose 4.55 per cent to SFr413.50 ($250.15)in a day of heavy trading and price variations, after closing at SFr395.50 on Friday.

Hüppi had already announced that he would step down as CEO as soon as a new chief executive for the company has been found.

In an interview with the SonntagsZeitung newspaper, Hüppi admitted to making a number of "errors" during his time at the company.

He said he had imposed structural changes too rapidly, generating an excessive workload and insecurity at management level.

"It was unfortunate that these changes took place in 2001, when the financial markets sunk to their deepest level in years and when there were the attacks of September 11," he said.

Hüppi added that public relations within the insurance and financial services divisions during that time had been a weak point.

Hüppi announced his resignation as head of Europe's third largest insurer after months of pressure from investors unhappy with his stewardship. Hüppi came under fire for his expansionary strategy, and his dual role as chairman and CEO.

The company also announced on Friday that Zurich would appoint current vice-chairman Lodewijk van Wachem as its new chairman, although there was no news about a new CEO.

Frustrations

In the interview, Hüppi said he felt frustrated that Zurich was being described as a company in crisis. "It's simply not the case," he said. "I hope that my resignation will change that image."

The group made a loss of $387 million (SFr650 million) last year, compared with a profit of $2.33 billion in 2000.

The decision to leave had been hard, Hüppi said, particularly as it forced him to acknowledge that he had personally been the group's "problem".

"But I'm confident about the future," he said. "I'm sure that I'll find a new challenge."

Strong track record

Hüppi joined the company in 1963, and since becoming CEO in 1991, helped transform the medium-sized firm into a global financial services group.

A string of acquisitions boosted the company's fortunes, until last year when it ended its expansionary drive with the sale of a US fund manager to Deutsche Bank.

Investors were also faced a series of profit warnings issued last year, revelations of internal disputes, and a number of ill-fated internet ventures.

The share price in the company has fallen over 50 per cent in the last twelve months.

swissinfo with agencies

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