By Simon Jessop and Iain Withers
(Reuters) -British insurer Legal & General has named Banco Santander (BME:SAN) executive Antonio Simoes as its new CEO, opting for an external hire to succeed veteran boss Nigel Wilson and lead the FTSE 100 firm through volatile markets.
The company, one of Britain's largest insurers by assets and market capitalisation, is like rivals grappling with big regulatory changes and sticky inflation.
Simoes will also step into one of the City of London's most prominent roles, at a time when Britain's financial sector is undergoing a welter of reforms to try to regain its lustre and stem a flow of companies opting to list in New York instead.
Analysts at KBW said the hire underscored L&G's overseas expansion ambitions, given his international experience.
The Portuguese national has been regional head of Europe for Santander since September 2020 and will take up his position at L&G on Jan. 1 next year, subject to regulatory approval.
Simoes is considered one of the financial industry's most high profile gay executives, and was named the most influential gay executive by awareness group OUTstanding in Business in 2013 and has been credited with raising the profile of diversity issues.
Once seen as a potential CEO candidate at both Santander and at prior employer HSBC (LON:HSBA), Simoes said in an L&G statement he was proud to take over from Wilson at a "critical time" for the insurance industry.
Wilson announced his retirement earlier this year after more than a decade in the job, during which the company's profit and share price has more than doubled, although analysts have said the stock is still relatively unloved by investors.
"With L&G's and the sector's valuations appearing cheap, an external appointment, in particular one with non-insurance experience, may be able to revive the investment case and equity story," analysts at RBC Capital Markets said in a note.
L&G had been widely expected to promote someone internally to the top job and the move could lead to departures from the company's top ranks, the RBC analysts added.
Legal & General shares were down 2% at 0755 GMT, compared to a broadly flat FTSE 100.
In his current role, Simoes leads Santander's retail and commercial banking, corporate and investment banking, wealth management and insurance businesses in the United Kingdom, Spain, Portugal and Poland.
Before joining Santander, he spent 13 years at HSBC and has also worked for consultants McKinsey.
Simoes will receive a basic salary of 1.175 million pounds ($1.49 million) a year, L&G said.
"Antonio brings a formidable leadership track record at the most senior level of financial services, working across complex, global organisations," said L&G Chair John Kingman in the company's statement.
($1 = 0.7908 pounds)