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Tearful Bernheim Bows Out as Generali Chairman, Says He's Been `Punished'

Assicurazioni Generali SpA, the largest Italian insurer, named Cesare Geronzi, the outgoing chairman of its largest shareholder, Mediobanca SpA, as its new chairman and Giovanni Perissinotto as its sole Chief Executive.

Geronzi, 75, replaces 85-year-old Antoine Bernheim, who was named honorary president at Generali’s annual meeting today in Trieste, Italy. Perissinotto’s former co-CEO, Sergio Balbinot, now will lead the company’s international insurance units.

“We expect the effect of the Geronzi’s appointment to be negative for the shares,” Fabrizio Croce, a Zurich-based analyst with Kepler Capital Markets SA with a “hold” rating on the stock, wrote in a note yesterday. “Investment funds, Anglo- Saxon investors and ethical funds could have a potential issue with the appointment and may reduce their positions.”

Some investors are concerned with the influence Milan-based Mediobanca, Italy’s biggest investment bank, has over the insurer. Geronzi today said Generali doesn’t plan a capital increase, which might dilute Mediobanca’s 14 percent stake. He also ruled out a merger with Mediobanca.

Still, the decision to make Perissinotto, 56, the company’s single chief executive “will satisfy investors worried by Mediobanca’s strength on the board,” Edoardo Liuni an analyst at NuovoMercato.it said in a phone interview today. “Perissinotto will ensure independent leadership at the insurer.”

‘Punished’

Bernheim, who was chairman for eight years, said he regretted Mediobanca’s decision to replace him.

“Sometimes when you work well, you are punished,” said Bernheim, who has spent almost four decades with the company. “This is an example.” He didn’t elaborate the comment.

Geronzi, speaking at a press conference after the annual meeting, said that Bernheim’s words were understandable given his long tenure at the insurer. “I appreciate Bernheim, as witnessed by his appointment as honorary president,” he said.

Bernheim was moved to tears several times during his one- and-a-half hour speech that was translated from French. He said he wished “all the best” to the new management.

Geronzi was reinstated as chairman of Mediobanca by investors in 2007 after a conviction in connection with the bankruptcy of property and tourism company Italcase. He was acquitted of the charges in 2009 on appeal. Geronzi, who won’t have an executive role at Generali, was also formerly a Bank of Italy official and chairman of Rome-based Capitalia SpA.

Nagel, Caltagirone, Bollore

Generali appointed non-executive deputy chairmen today: Mediobanca CEO Alberto Nagel; Francesco Gaetano Caltagirone, the chairman of publishing and media company Caltagirone Editore Spa; and French billionaire Vincent Bollore.

Enel SpA CEO Paolo Scaroni, Banco Espanol de Credito SA Chairwoman Ana Patricia Botin, Tod’s SpA Chairman Diego della Valle, and De Agostini SpA CEO Lorenzo Pellicioli also were named Generali board members.

Generali today said first-quarter gross premiums rose 16 percent, boosted by its life-insurance business and a recovery of Italian operations.

Total premiums increased to 20.8 billion euros ($27.8 billion) in the first three months of 2010 from the year earlier, Perissinotto said. Italian premiums rose 22 percent to 5.4 billion euros because of a 34 percent increase in life- insurance business.

“We have seen positive elements in the first quarter,” he said. “We hope for a consolidation of the economic recovery that would allow us to increase our profitability.”

Greece, Spain, Ireland

Generali has declined 11 percent this year, compared with the 2.2 percent increase in the Bloomberg Europe 500 Insurance Index. The company has a market value of 26 billion euros.

Generali has 900 million euros of “exposure” to Greece, Spain, Portugal and Ireland, the company said today.

Generali, which will release its first-quarter results on May 12, is expanding in emerging markets, including China and the Middle East, as it recovers from the economic crisis. Perissinotto said that the external growth is a priority for Generali.

The insurer wants to increase its business in Russia, where it owns a 38.5 percent holding in Ingosstrakh. Perissinotto said he aims to resume talks with Oleg Deripaska, who owns the remainder, about raising the stake.

Generali doesn’t plan to boost its stake in Banco Santander SA, Perissinotto said.

To contact the reporter on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net

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