Munich, Dec. 18 (Bloomberg) - Allianz AG Chief Executive Officer Henning Schulte-Noelle, who made more than 50 purchases to build Europe's biggest insurer, quit after Dresdner Bank, his biggest acquisition, led to record losses and a sliding stock.
Schulte-Noelle will leave in April after 11 years as CEO, the company said in a statement. He will be replaced by Michael Diekmann, 47, who sits on the company's management board and oversees Allianz's insurance business in the U.S.
The 60-year-old Schulte Noelle has been criticized by investors since his $20 billion takeover of Dresdner left Allianz with mounting bad loans and an unprofitable investment bank. He is among Germany's most powerful executives, sitting on the boards of companies ranging from Siemens AG to Munich Re.
"The new CEO wasn't the inventor of the Dresdner deal and he has to make the best of it, which Schulte-Noelle couldn't do," said Juergen Lukasser, who helps manage $5.1 billion at Vienna-based Constantia Privatbank AG and holds Allianz shares.
Diekmann has moved up the ranks at Allianz since joining the company in 1988 as an assistant to the head of the Hamburg regional office. After serving different roles, he was promoted to take charge of central and Eastern Europe, the Middle East, Africaand group management development in 2000.
This year, he was put in charge of the North and South American businesses, including Fireman's Fund Insurance Co. in the U.S.
Plunging Stock
The Dresdner acquisition was supposed to crown Schulte-Noelle's 26-year career at Allianz during which he turned the 112-year-old German casualty insurer into a global financial services provider with 150,000 employees in 70 countries.
Schulte-Noelle last month told investors he expected Allianz to be profitable in 2003 after company had a loss of 950 million euros ($974 million) in the first nine months of this year.
Allianz shares have dropped 61 percent in 2002, ranking 24th of 27 companies tracked by the Bloomberg Europe Insurance Index. The stock was down 62 cents, or 0.6 percent, at 104.39 euros at 2:50 p.m. local time.
Schulte-Noelle bought two U.S. fund managers, Pimco Advisors Holdings LP and Nicholas-Applegate Capital Management LP, in 1999 and 2000 for more than a combined $2.4 billion as market prices were peaking. Allianz also owns Fireman's Fund Insurance, wherereserves for asbestos-related claims were doubled this year to 1.5 billion euros.
CEO Departures
Schulte-Noelle is the latest top European executive to step aside as losses widen. Lukas Muehlemann was replaced as CEO of Credit Suisse Group, Switzerland's No. 2 bank, in September. Today, Vodafone Group Plc said CEO Christopher Gent will quit as the world's largest mobile-phone company battles slowing growth.
"For me it's a big question mark and today's announcements don't change this," said Yann Goffinet, who helps manage $42 billion at Zurich-based Vontobel Asset Management and holds Allianz shares. "When CEO changes happen, the problems aren't solved. The issues remain."Schulte-Noelle, who has a scar on his left cheek from a university fencing duel, has had to cut costs at the unprofitable Dresdner Kleinwort Wasserstein investment bank and at the same time keep Dresdner's top bankers from leaving.
Allianz spent 620 million euros last year on an overhaul that included cutting 8,000 jobs at Dresdner. Departures at the bank included Bruce Wasserstein, who sold his boutique to Dresdner for $1.56 billion in 2000.
Dresdner, Germany's No. 3 bank by assets, contributed 972 million euros of losses to Allianz's record third-quarter loss of 2.5 billion euros. Provisions for bad loans climbed to 1.8 billion euros.
Investors have been losing confidence in Schulte-Noelle's ability to revive Allianz's business, according to a survey in September by Germany's Manager Magazine. Only 48 percent of shareholders thought Schulte-Noelle could boost Allianz shares,down from 58 percent in June.
