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Swiss Re says CEO to retire, to be replaced by reinsurance head

Swiss Re said the head of its reinsurance business would take the helm of the company as its current CEO retires, while also announcing a hefty jump in annual net income and a new share buyback of up to $1 billion.

The Zurich-based firm said on Tuesday that 46-year-old Swiss Christian Mumenthaler would replace Chief Executive Michel Lies, who has led the reinsurer since 2012 and been with the company for more than 35 years.

The company's net profit for 2015 climbed 31 percent to $4.6 billion, matching analysts' forecasts. It posted a $938 million profit for the fourth quarter.

Michel Lies, chief executive officer of Swiss Reinsurance Company.
Jason Alden | Bloomberg | Getty Images
Michel Lies, chief executive officer of Swiss Reinsurance Company.

Swiss Re said the buyback of as much as 1 billion Swiss francs ($1 billion) would be carried out before its 2017 annual shareholder meeting if excess capital is still available, there is no major loss event and the group does not find another use for the capital.

It also lifted its regular annual dividend to 4.60 Swiss francs from 4.25 francs, although that was below the 4.75 francs analysts had forecast.

The change at the top, to take effect on July 1, follows the completion of Swiss Re's 2011-2015 financial goals. These included a return on equity of at least 700 basis points above risk-free 10-year U.S. government bonds and boosting earnings per share by an average of 10 percent each year.

"I am convinced that Christian Mumenthaler and his team will further strengthen the role of Swiss Re in our industry," 61-year-old Lies said in a statement.

Reinsurers like Swiss Re, Munich Re and Hannover Re act as a financial backstop for insurance companies, helping them pay for large damage claims from hurricanes or earthquakes in exchange for part of the premiums.

Earlier this month, the world's biggest reinsurer Munich Re raised its dividend by more than expected.


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