USF&G Corp., the large troubled insurance company based in Baltimore, yesterday named the head of a Chicago-based financial services company as its new chairman and chief executive officer.

Norman P. Blake Jr., former chairman of Heller International Corp., is to assume his duties at USF&G today. He succeeds Jack Moseley, 59, who announced earlier this month that he is taking early retirement. At the time of Moseley's announcement, USF&G reported a $15 million loss for the third quarter and cut its quarterly stock dividend to 25 cents per share from 73 cents.

Blake, 49, takes over at a time when USF&G, like many other insurers, is struggling to deal with poor conditions in the commercial property-casualty market and an investment portfolio battered by downturns in high-risk, high-yield junk bonds and in real estate.

"The insurance sector, like the financial services industry, is entering an era of change that will require energy and creativity to meet these challenges," Blake said in a statement. He added that he is "thrilled" at the prospect of taking on these challenges.

The challenges will be considerable, analysts said.

"Hopefully, he would have been brought in by the board {of directors} with a mandate to take the corrective surgery that is needed" to improve the company's financial performance, said Herbert E. Goodfriend, an independent analyst in New York, who has followed insurance stocks for many years.

Goodfriend suggested that Blake will "probably take a fresh look at how capital is allocated" among USF&G's main business lines -- property-casualty insurance, life insurance and financial services.

This last sector includes an "array of acquisitions" outside of insurance, including money management services and consulting, that "never lived up to management's or Wall Street's expectations," Goodfriend said.

At Heller, Blake is credited with reversing the fortunes of Heller Financial Inc., the firm's domestic subsidiary, which specializes in various forms of commercial lending. The company went to profits of $102 million last year from losses of $184 million in 1984, while assets grew to $6.9 billion from $3.3 billion in the same period.

Heller, which is a subsidiary of Fuji Bank Ltd. of Tokyo, offers financing for leveraged buyouts and commercial real estate, among other areas, providing Blake with experience that he may find useful in dealing with USF&G's portfolio.

Before joining Heller in 1984, Blake was executive vice president at General Electric Credit Corp., another large commercial lender. At GE Credit, he supervised a $13 billion asset portfolio.