Weekly Wrap: New CEO officially takes over at major insurer

Weekly Wrap: New CEO officially takes over at major insurer | Insurance Business

Weekly Wrap: New CEO officially takes over at major insurer
New CEO officially takes over at major insurer
The new CEO of the Suncorp Group has officially taken the reigns at the major Australian insurer.

Michael Cameron, formally of property company The GPT Group, took over from the departing Patrick Snowball yesterday and will aim to continue the Englishman’s legacy at the firm.

“The achievements of the past six years have been extraordinary and I now relish the opportunity to maximise market opportunities, harness the potential of our highly-committed and engaged staff, and deliver even greater value to our shareholders and customers,” Cameron said in a statement to the ASX.

“I am excited by the future of the Suncorp Group and I am delighted to lead this talented team of people as we begin a new chapter.”

Chairman of the Suncorp Group, Dr Ziggy Switkowski, formally welcomed Cameron to the business and believes his time spent as a board member will help steer the company in the right direction.

“As a member of the Board, Michael has been directly involved in setting and overseeing the Group’s strategy,” he said.

“Michael is now ready to lead the organisation into the future while maintaining stability and keeping the momentum going.”

Leading life insurer announces new chief group insurance officer
A leading Australian life insurer has announced a major new appointment with a new chief group insurance officer joining the company.

AIA Australia has announced that Stephanie Phillips will step into the role and will be responsible for distribution, product, pricing and operations across the country.

Phillips, who has been acting in the role since June, has been officially confirmed in the position having joined the company in 2009.
AIA Australia CEO, Damien Mu, stressed that Phillips’ experience within the company was key to her hiring.

“Steph has been an asset to the company and has already achieved some significant milestones in her role as acting Chief Group Insurance Officer,” Mu said.

“Importantly, she provides the team, our clients and our partners with not only the experience required to deliver on the strategic goals of the business, but also good stability and continuity as she has already been acting in the role over the past three months.”

Company CEO sold US$10mn in stock before big merger announcement
Opponents of the planned merger between Willis Group and Towers Watson have new fodder for criticism.

Before the US$18 billion merger was announced in late June, Towers Watson Chief Executive John Haley sold nearly US$10 million worth of company shares, the Wall Street Journal reported Thursday.

According to regulatory filings attained by the paper, Haley exercised 106,933 stock options and sold the underlying shares for a US$9.7 million profit. The sale was Haley’s first in more than a year, and accounted for 55% of his stake in the professional services company.

The subsequent deal with Willis hit Towers Watson shareholders hard; criticism of the deal – which valued the company at about 9% less than the prior day’s closing price – led to a near 9% fall when the merger was announced on June 30. In fact, investors with Towers Watson swiftly filed a lawsuit against the company, alleging that company directors broke with their fiduciary duties in agreeing to the transaction.

Stockholders widely agreed that the person who stood the most to gain from the Willis-Towers Watson merger was Haley, who would be named CEO of the combined company despite a minority share of 49.9%.

“This deal destroys shareholder value,” Matthew Schoenfield, an assistant portfolio manager at Driehaus Capital Management told the WSJ.

Haley declined to comment on the development, though a person familiar with the matter said the trades took place early in the company’s merger talks with Willis and were cleared by Towers Watson’s legal team.

Haley does not have a 10b5-1 plan, which allows executives to preschedule transactions for certain times or price triggers.

Kevin Murphy, an executive compensation expert and professor at USC Marshall School, told the newspaper that Haley’s decision to sell stocks is “unusual” and that “such moves tend to not go over well with investors.”

“Certainly, as a shareholder, you want to see a CEO that has skin in the game,” Murphy said. “You want to see them standing behind” major moves like mergers.

Murphy noted, however, that Haley has otherwise been “shareholder-friendly” given the absence of a “golden parachute” that would kick in when control of the company changes.

Haley has been CEO of Towers Watson since 1999, and has overseen a series of small acquisitions. In 2010, a merger with consulting firm Towers Perrin Forster & Crosby created what is today Towers Watson.

The newly combined company will be called Willis Towers Watson and is valued at US$18 billion, expected to bring in revenues of US$8.2 billion.

Willis is also anticipating US$100 million to US$125 million in savings as a result of the deal, to be realized within three years of its closure.

The new firm will employ more than 39,000 workers in 120 countries – a key selling point for both companies looking to increase their global footprint.

Since the deal was announced, Towers Watson shares have traded about 13% lower, closing Wednesday at $120.16 – about 4% higher than the value of Willis’s merger offer.