Share prices for Assicurazioni Generali climbed on Monday in the wake of a boardroom coup at the weekend that saw CEO and Managing Director Giovanni Perissinotto ousted and replaced by Mario Greco, the CEO at Zurich Insurance.
Generali shares were up on the Milan stock exchange by 1.35% at mid-session despite recognition from some insiders that Greco will need time to turn things around at Europe's third-biggest insurer after five years of slumping share prices, which have worsened over the past months due to the bank's exposure not only to Italian government bonds but also risky Greek bonds.
The push to oust Perissinotto, who had been with the group for over 30 years, was reportedly led by two of Generali's leading shareholders, Mediobanca and the Luxottica group of Leonardo Del Vecchio, one of Italy's richest men.
A statement from the group said the shake-up was made due to the ''necessity to bring change in management''. It also thanked Perissinotto for his long service to the group.
Zurich Insurance on Monday announced that it had received Greco's letter of resignation which it said it had accepted immediately although with ''deep regret'', adding that it ''understood and supported'' the manager's decision to ''take up this new challenge''.
By picking Greco, Generali broke with a tradition of choosing its top managers from within its own ranks. However, he had already been on a short list for the job in 2004, when Perissinotto won out thanks to the support of Mediobanca.
The 53-year-old Neapolitan's experience in the insurance sector includes a 10-year term at Italy's second-biggest insurer RAS, from 1995 to 2005, during which time he was able to double the company's stock value.
Sector operators said Greco was the right man for the Generali job thanks to his ''foresight and strategic vision'' that he follows up with ''step-by-step determination''. He is also said to be in the graces of stock market traders for his ability to offer clear analyses of market and sector realities.
Before taking over his new duties, Greco must first be elected to the Generali board and until then the duties of CEO and managing director will be held by Generali Chairman Gabriele Galateri.
The term of the whole Generali board will expire next year.