A change of leader often brings uncertainty to a publicly listed company, particularly when the company has been unable to source from within, and instead hired a company outsider as its new CEO.

Such is the case with Medibank Private Ltd (ASX: MPL), which Fairfax media has reported is likely to hire former National Australia Bank Ltd. (ASX: NAB) Chief Financial Officer Craig Drummond as its new CEO. Medibank’s current CEO, George Savvides, announced his upcoming resignation several months ago.

Mr Drummond has extensive experience in the banking industry, and his former roles include Group Executive of Finance and Strategy at National Australia Bank (~2 years), Chief Executive of Bank of America Merrill Lynch Australia (~4 years), and Chief Operating Officer (COO) of Goldman Sachs JBWere.

Media reports over the past few years have been complimentary of his abilities and integrity – as indicated by his staying on at NAB when passed over for the CEO role – although I could find no evidence of experience in the insurance industry per se. However, many abilities such as leadership, analytical and management skills will be highly transferable. Suncorp Group Ltd’s (ASX: SUN) new CEO, Michael Cameron, was formerly a property CEO at GPT Group and appears to have settled in well to the bank/insurer.

Fairfax media’s reporting seemed to indicate they expect Mr Drummond to announce acquisitions to take advantage of Medibank’s strong balance sheet and Drummond’s investment banker background. Certainly his tenure at NAB was characterised by a number of big deals, including the Clydesdale bank divestment.

However, given that Medibank is already the market leader in Australia, acquisitions may not make sense unless there’s a clear competitive advantage, new capabilities, or synergies to be derived from the purchase. Medibank comes with a handful of existing problems, including recent underinvestment in its brand, cannibalism of its premium brand by its low-cost brand, high industry churn, stiff competition, ‘critical’ insurance affordability issues as well as a stagnant or potentially shrinking overall market size.

It’s uncertain whether buying growth would be the right decision for the company right now, and certainly investors should hope that dealmaker Mr Drummond is not the proverbial ‘man with a hammer’ to whom everything appears as a nail.

With that said, Mr Drummond has shown his investment savvy and ability to make the tough decisions at NAB, and appears to be a solid candidate who deserves the faith of investors if and when his appointment is ultimately announced.

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Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.