Delta LLoyd NV Chief Executive Officer Niek Hoek, who led the Dutch insurer through its split from Aviva Plc, plans to step down next year.
Hoek’s open-ended employment contract will end on June 30, 2015, when he takes early retirement, the Amsterdam-based insurer said in a statement today. The company’s supervisory board is starting a search for a successor, it said. The shares fell as much as 2 percent.
Hoek joined Delta Lloyd in 1997 and became CEO in 2001, when it was majority-owned by Aviva Plc, the second-largest U.K. insurer. He oversaw the firm’s initial public offering in 2009, when Aviva sold part of its stake. Delta Lloyd, tracing its roots back to 1807, became fully independent in January 2013. Hoek helped the company weather a shrinking Dutch market for individual life insurance products and bolster capital by focusing on group pensions and cutting costs.
“We consider his departure as a clear negative, given that he was CEO for the last 13 years and knows Delta Lloyd and insurance in general by heart,” said Maarten Altena, an analyst at Mediobanca SpA in London. “Hoek could have been an important decision maker in the Dutch consolidation landscape, as he knows the market and its players well.”
Delta Lloyd was added to the AEX-Index, the Netherlands’ benchmark, last month after the shares rose more than 26 percent since their IPO. The shares, sold for 16 euros apiece in November 2009, fell 2 percent to 20.51 euros by 10:22 a.m. in Amsterdam, cutting the company’s market value to 3.94 billion euros ($5.44 billion).
Finance Minister Jeroen Dijsselbloem said in August he expects consolidation in the Dutch life insurance market because revenue and profitability are under pressure. Consumers’ confidence in the industry has also been hurt by unit-linked products sold in the past, he said, while low interest rates are depressing investment returns.
Gross written premiums for individual life insurance products dropped to 11 billion euros in 2012 from 17.6 billion euros in 2007, according to data from the Dutch Association of Insurers, which represents 95 percent of the market.
Hoek will get as much as 800,000 euros, one year’s base salary, to partially compensate for a pension shortfall and the loss of an agreed on transitional pension, Delta Lloyd said.
“Under his 17 years’ stewardship, Delta Lloyd has grown from a local subsidiary of a British insurer to a leading independent insurance company listed on the AEX and the BEL20,” Supervisory Board Chairman Jean Frijns said in the statement. “This is a huge accomplishment and provides a strong foundation for Delta Lloyd’s future.”