The man who steered the Pru to safety
Stunning results: Mark Tucker
There is not much time for corporate small talk when you accompany Mark Tucker to watch Chelsea. The Prudential chief executive weighs up every move with the eye of a seasoned professional. Weaknesses and strengths are assessed coolly without the usual invective of the football fan.
This is not that surprising. Tucker cut his teeth not as the man from the Pru selling insurance but as a footballer making appearances in the shirts of Wolverhampton Wanderers, Rochdale and Barnet, before hanging up his football league boots, completing a business degree from Leeds University and earning a coaching badge.
Normally, one might expect to see a leading British tycoon featured only on the JC’s business page. But the 52-year-old boss of the nation’s most venerable insurance name made his last appearance on the sports pages in 2007 while playing for the London Maccabi Lions over 35s.
Tucker allegedly head-butted Glenthorne United centre forward Jason Levy and ended up with broken nose. “It was an unfortunate incident,” the London Maccabi Lions player acknowledged at the time, adding “our club was in no way the aggressor.”
It is Tucker’s sharp elbows and formidable adventurism which helped to propel him to the top. When he was appointed as the Pru’s chief executive in 2005, after the ousting of his predecessor Jonathan Bloomer, the insurer was in a vulnerable state.
The group had alienated the City after raising £1bn-plus from a rights issue to existing shareholders — intended for expansion of the UK business — and then failing to deliver. It had been beaten to the post by Hank Greenberg’s AIG in the battle for another US insurer American General and had failed in its efforts to dispose of its internet banking site, Egg.
The enemies were prowling and just months after taking the top job Tucker stood firm and fought off an ill-conceived £17 billion bid from rival Aviva (owner of Commercial and Norwich Union) which thought it could capture the Pru and its growth franchises in Asia and North America at a time of weakness.
Tucker staged a bold defence and in the end it was Aviva’s boss Richard Harvey who was gently squeezed out. Impatient shareholders were still demanding that Tucker change direction.
They wanted to see the business radically simplified and urged the sale of North American arm Jackson Life and Egg, and the splitting off the fast growing Asian businesses. Tucker decided to cut costs and do what the Pru was doing better. But he did get rid of Egg to Citigroup not long before the tsunami hit the banking sector.
In many ways he was the right person for the job. In previous roles at the Pru he had worked in the fastest growing parts of the business, Jackson Life in the US and in Asia. He is largely credited with having created what is now seen as the top insurer across several Pacific markets.
But he was frustrated by the company culture and left, without a job, in 2003 as the Pru floundered. After a short exile as finance director of Halifax Bank of Scotland based in Edinburgh, he was called back to Pru headquarters to the top job. This was something of a lucky escape given the mess at HBOS, now part of Lloyds TSB.
However, his return to the Pru has not been easy. As the credit crunch has worsened and uncertainty about the financial sector deepened, the short sellers of shares have turned their attention to the insurance giants. This is no accident. Many of the insurers hold subordinated bank stock as part of their capital and the closer the banks have moved towards nationalisation, the faster the shares in the insurers fell. Legal & General was hardest hit. Pru stock also took a terrible beating.
The worries have been short lived. In late February a buoyant Tucker unveiled a stunningly good set of financial results. Most importantly he was able to reassure the markets on the insurer’s safety net, reporting £2.5 billion of free capital, a sum improved by the sale of most of the group’s stake in a troublesome Taiwanese insurer. What perhaps surprised the market most was that Tucker was also able to rebuild growth in the UK market — for a long time the most tired part of the group.
When I talked to him about this, Tucker saw it “as a flight to quality”.
At a time when the reputation of so many financial organisations had been crushed by the credit crunch and uncertainty, both the core Pru brand — in pensions and protection products — and its investment M&G label were seen as safe and enduring.
Overall the group was able to report new premiums of £3 billion, up 5 per cent year-on-year. Growth was evenly spread across Asian, American and UK markets. Tucker was vindicated in his decision to keep the company together rather than do the splits.
The big question now is: what will be Tucker’s next move? Some analysts believe the Pru is biding its time and hopes to gobble up some of the Asian assets abandoned by flailing American rival AIG. This possibility is causing nervousness. But there is now enough confidence in the Pru boss to make sure that — barring some ghastly mistake — he will not suffer the fate of his predecessor and be shown a red card.
Alex Brummer, City Editor of the Daily Mail, has been shortlisted for the British Press Awards’ Journalist of the Year prize.