“Expectations for the fourth quarter were rather low because of ongoing restructuring at the general insurance unit,” said Daniel Bischof, an analyst at Baader Helvea who recommends buying Zurich’s shares. “The extent of the hit they took is nevertheless disappointing, and it remains to be seen whether this was a final clean-up or more needs to be done to fix the unit.”

Zurich fell as much as 9% to 224.2 francs, the lowest since November 2012. The stock was trading 9% lower as of 12:38 p.m. after declining 23% over the 12 months through Tuesday.

Dividend plans

Zurich will appoint Mario Greco, the head of its Italian rival Assicurazioni Generali SpA, as CEO, Swiss newspaper SonntagsZeitung reported earlier this month, without saying how it got the information. The Naples native had been shortlisted for the Zurich job when Senn was hired in 2010, people with knowledge of the matter said at the time. At Generali, Greco has cut costs, reduced debt and sold non-strategic units to revive profit that stood at a nine-year low when he took over in 2012.

A key question for investors is whether Zurich will cut its dividend and how it will use $2 billion in excess capital it had before Wednesday’s announcement. The insurer has paid out 17 francs a share every year since 2010 and has the highest dividend yield among Swiss stocks and European insurance companies.

“The arrival of a new CEO could lead to a final round of profit provisioning,” Jefferies analyst Mark Cathcart wrote in a note to investors Wednesday.

Zurich will probably stick to its dividend policy, said Vontobel analyst Stefan Schuermann, who maintained his hold rating but lowered his full-year outlook for earnings per share by 23% to 15.4 francs.

Sylvia Gäumann, a company spokeswoman, said by phone that the dividend will remain “attractive” and “sustainable,” but declined to comment on the possibility of a cut. She reaffirmed that the company is cutting jobs in the U.K. and Germany and said it is reviewing pricing methods and increasing the use of reinsurance in the non-life unit.

Accident losses

Beyond natural disasters, the company incurred a “very high” level of large losses from accidents in the fourth quarter, including several significant property claims. The global corporate unit was affected, along with business in some European countries that weren’t identified in the statement.

The group also plans to write off $230 million in goodwill for its German life business and will record the charge outside of fourth-quarter profit.

Zurich said it will provide more information on the non-life unit and on expectations for 2016 results when it reports on Feb. 11. Operating results for the farmer and global life units “should be in line with expectations,” the company said, adding that its capital position remains “very strong.”

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