Under its former chief executive, Mick Newmarch, the company faced widespread scepticism as it doggedly denied suggestions that its salesforce was in any way implicated in the pension transfer scandal.
Mr Newmarch, doughty and well respected, had become identified with a tough, no-nonsense approach which initially irritated and later infuriated both Government and financial regulators.
His sudden departure 13 months ago against a background of insider dealing allegations, later proved to be completely untrue, marked a new low for Prudential.
Then came Peter Davis, who professes himself slightly surprised by his appointment. A former chief executive at Reed, his previous experience lay largely in the supermarkets sector, most recently a 10-year stint ("good years", he says) at J Sainsbury. After his departure from Reed, he was asked to join the Pru board in 1994.
Mr Newmarch's shock departure meant a sudden decision for Mr Davis himself: "I was about to do something else and had committed myself elsewhere. I was on the nominations committee because I was not a candidate. They met without me and Sir Martin Jacombe, the chairman, said, `We actually think you should do it'. So I then had to extricate myself from the other commitment."
Today, the company is riding high. In March, barely a year after his appointment as Prudential group chief executive, the company reported record operating profits of pounds 804m.
Last week, the Pru announced a 12 per cent increase in worldwide premium income for the first three months of the year, up to pounds 1.6bn. In the UK, where the company's problems were particularly acute, sales of single premium products were up 34 per cent to pounds 866m, the highest quarterly total for more than two years.
It would be easy to deduce from this that Mr Davis is solely responsible for the rapid turnaround in the fortunes of the Pru.
In fact, Mr Davis is quick to point out that the past year's successes are not down to him alone: "I can't claim any credit for them. The real improvement in profit came out of the US, because of actions that Mick Newmarch took in `92 and `93 to change the way the companies were run and change the management This is a very long-term business."
Certainly, there have been changes since Mr Davis was appointed in March last year. One of them has been the more emollient approach by the Pru towards the issue of industry regulation.
Another noticeable difference is in the company's medium-term strategy. Mr Davis believes that the UK provides the Prudential with one of the biggest challenges - and opportunities - it is likely to face over the next few years. "There is a growing tendency towards convergence, where the banks, building societies and life companies are coming together. Banks are buying building societies, building societies are opening life companies.
"In the next five years, I think we will see the emergence of six or seven major retail consumer financial players and I want the Prudential to be among them." This view of the changing face of the UK financial services industry led Prudential to announce it will launch its own telephone- based banking service later this year.
As a first step, Prudential will bring under its roof the pounds 700m-plus of mortgages it arranges each year.
It also wants to retain a significant proportion of the pounds 1bn paid out annually on its maturing policies through other lenders, enticing them into deposit-style accounts.
Even so, Mr Davis notes that the pace of change is accelerating. Hence Prudential's stated wish to acquire either a building society or a UK life company. "We are going to find ourselves competing with much larger organisations who will have an integrated product range, from banking right through to life products."
Mr Davis refuses to be drawn on the Prudential's takeover preferences: "The balance is in favour of a life company but we are also studying whether we would achieve our objectives as well, or better, through a building society."
Positioning the Prudential for the changes taking place within the UK industry also means taking on board the issues that affect its work in the next few years. Foremost among them has been the regulation and downturn in sales after the pension mis-selling problem exploded in 1993.
Despite the recent tail-off in sales, people will sooner or later be forced to return to the subject of personal pensions, Mr Davis argues. "I would be surprised if occupational pensions schemes continue in quite the same way. Many companies have been able to take a holidays from contributions because of surpluses created by good equity markets in the eighties and the reduction of workforces. I don't believe that is going to continue forever."Reuse content