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Zurich Insurance Said to Present CFO Report End October

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Oct. 15 (Bloomberg) -- Zurich Insurance Group AG will present the outcome of an internal investigation over the suicide of Chief Financial Officer Pierre Wauthier at the end of this month, said a person with knowledge of the matter.

A report on whether undue pressure was placed on the CFO after he mentioned former Chairman Josef Ackermann in a suicide note has been completed, said the person, who asked not to be identified because the matter hasn’t been made public. Ackermann, 65, quit three days after Wauthier was found dead in August, calling the allegations “unfounded.”

Wauthier’s suicide sparked fresh doubts about Zurich Insurance’s financial health after it missed analysts’ profit estimates in both of the last two reported quarters. Chief Executive Officer Martin Senn, 56, will present his targets for the three years through 2016 to the executive board in Zurich today, said a separate person familiar with the matter.

“Zurich’s management now need to be as transparent as possible,” said Boris Boehm, who helps manage about 1.5 billion euros ($2 billion) at Aramea Asset Management in Hamburg, Germany. “If things are only addressed behind closed doors, it will tarnish the company’s reputation.”

The Zurich-based company declined to comment in an e-mailed statement today, calling it an “ongoing review.”

‘More Challenging’

Zurich Insurance said on Aug. 15 it will be “more challenging” to reach targets for the three years through 2013, which include improving the combined ratio, a measure of profitability, by as much as 4 percentage points at its general insurance business relative to competitors and increasing the market share of its U.S. home and auto policies unit.

Switzerland’s largest insurer is scheduled to present its new three-year plan to investors on Dec. 5.

The shares closed at 238.10 Swiss francs in Zurich, up 1.1 percent on the day, valuing the company at 35.4 billion Swiss francs ($39 billion). They have dropped about 2 percent this year, while the 30-member Bloomberg Europe 500 Insurance Index increased 20 percent.

With shares declining following the suicide, Senn was forced to tell analysts on Aug. 30 that there’s no link to the company’s financial performance. Tom de Swaan, who was appointed chairman after Ackermann’s departure, has said that he’s not aware of any inappropriate behavior toward Wauthier. The company hasn’t yet named a new CFO.

Daniel Bischof, a Zurich-based analyst at Helvea with a buy recommendation on the insurer, said that it’s important for Senn to present “realistic and credible targets” for the coming three years, appoint a new CFO and show “one or two clean quarters without any negative surprises.”

“Zurich has lost a number of strong leaders who drove high performance and were trusted by investors,” said Andy Broadfield, an analyst at Barclays Plc in London, who rates the shares equal weight, adding that new targets will be “important.” It’s “crucial for Martin and his team to then deliver to recover some of that lost confidence.”

To contact the reporters on this story: Carolyn Bandel in Zurich at cbandel@bloomberg.net; Oliver Suess in Munich at osuess@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net