Allianz is set to extend the contract of its Chief Executive Michael Diekmann by two years as the German insurer seeks to soothe the turmoil over leadership change at its PIMCO subsidiary, a German newspaper reported.

Michael Diekmann
Michael Diekmann

Allianz’s supervisory board will meet this week and likely give Diekmann a new two-year term, in a move that would disregard the insurance group’s own age limit of 60 years for top executives, daily Handelsblatt cited company sources as saying.

Allianz was not immediately reachable for comment.

The insurer suffered a humiliating blow on Friday with the resignation of renowned investor Bill Gross as leader of PIMCO, the asset manager Allianz relies on for one fourth of its operating profit.

The latest turmoil forms a difficult backdrop for discussions in Allianz’s supervisory board, which according to sources familiar with the proceedings is due to meet on Thursday.

News of Gross’s immediate departure wiped more than 4.3 billion euros ($5.4 billion) off the insurer’s market capitalization and comes at a delicate time for its leadership, with the terms of CEO Diekmann and five more of the insurer’s 11 board members due to expire at the end of the year.

Allianz has said its supervisory board would tackle personnel issues in October but declined to confirm the Oct. 2 meeting date and would not comment on any management changes.

(1 US dollar = 0.7883 euro)

(Reporting by Ludwig Burger; Editing by Georgina Prodhan)