Clare Spottiswoode groans. She is not a morning person at the best of times, and trying to explain "orphan assets" – the billions of pounds in surplus funds held by life insurers – during a radio interview at this time would tax a confirmed lark.
However, she can at least toast a partial victory during this morning's conversation. Norwich Union has agreed to divvy up £2.3bn of the excess cash in its life insurance fund and some 90 per cent of it will be paid as a special bonus to the policyholders she is employed to represent. Shareholders will get 10 per cent. That 90/10 split is how with-profits life insurance funds traditionally share returns between the two.
However, when the French insurer AXA carried out a similar exercise, policyholders only got just over 30 per cent. The High Court and an actuary argued this was fair but it sparked a furore and led to changes in the law that required companies trying similar tricks to appoint an advocate for their policyholders. At NU there is still as much as £3bn of surplus to be fought over, even after the £2.3bn has been paid out and this time the company wants much more than 10 per cent.
Trouble is, if the insurer ever thought Ms Spottiswoode would be a pushover when it appointed her to represent its policyholders – at an annual salary of £250,000 – it certainly doesn't any longer. Ms Spottiswoode has appealed to the company's board to allow her to present her case, but so far it has declined. Nonetheless, if NU continues to play hardball she has made it quite clear that she is prepared to say "no deal". This means that £3bn or so could well remain where it is as unowned, unclaimed "orphan" assets.
Having conducted the interview, Ms Spottiswoode attempts to catch an hour of sleep. When she gets up for real, she says, she has to be careful to avoid blundering into the bathroom when her 17-year-old son is using it. "Having mum come in when he's in the shower is the last thing he wants at his age," she laughs. "I read the newspapers over breakfast before I squash into the Northern Line to head to NU's offices in Fenchurch Street."
Ms Spottiswoode describes having an office in the heart of "enemy territory" as "a mixed blessing". This morning, however, she won't bump into any NU staff until later in the day because she meets with her small team at a nearby Carluccio's for coffee. They have a morning meeting at the Financial Services Authority and she says the Italian restaurant is a more salubrious place to do the last-minute preparations than her office. Besides, she needs a hit of caffeine.
"We need to get out by 9.30am so we can get to the FSA for 10am. It's usually a race to see if we can fit getting the coffee in then paying the bill in time – the service leaves something to be desired," she says. It might be advisable for the staff to take note – Ms Spottiswoode is an engaging conversationalist but she's not one to be messed with. She took on the gas industry when working as its regulator, striking fear into the hearts of executives who have been known to refer to her as "Boadicea" and even "Herod".
The FSA is key player in the negotiations, not least because it will have to sign off any deal struck between Ms Spottiswoode and NU. Of this morning's get-together she says: "It's a serious meeting. We are talking about an awful lot of money after all."
But she does not mince words about the FSA: "What we are trying to do is encourage them to change their attitude and approach. I used to be a gas regulator so I'm used to making sure you don't have conflicts and cross subsidies. I'm used to making sure the industry works for UK plc. The trouble with the FSA is they don't think of themselves as an economic regulator the way I did."
She explains: "What you have to do is think about what companies do and what incentives they have to operate in a certain way. If there is an incentive to misbehave they will do so and it is up to you as the regulator to make sure the incentive is not there. The FSA is not doing that because it does not see itself as an economic regulator. The trouble is the FSA seems to assume that competition is working when it is not and will not intervene to sort it out. But it wouldn't be difficult to sort out. You could write it one piece of paper."
A piece of paper that would say 90/10. End of debate. Still, she says, the meetings are cordial. "I always think that the way to deal with anybody is to make sure you have a professional relationship."
Ms Spottiswoode and her team retire to Bar M for lunch near her office to chew over the meeting. When she returns to her desk she has a series of papers to wade through from actuaries and lawyers, as the debate over the remaining £3bn or so heats up. She is currently preparing a 350-page report which will outline the arguments of her team with the help of her own actuarial, legal and accounting advisers.
The advisers will be in at 2.30pm to help go through NU's new business numbers. One of the discussions about the "surplus" cash is how much of it the company needs to support writing new policies and how much could be paid out to policyholders. The debate over this is fierce and so Ms Spottiswoode, her team and her advisers are paying close attention to NU's numbers. "We are going over them with a fine tooth comb," she says. "We need to make sure that they make sense, that they add up. We are not sure that they do make sense. I'm lucky in that I am a mathematician and I can get to grips with most of it." This exercise takes up much of the afternoon.
Ms Spottiswoode is officially on holiday now. However, in addition to her job battling on behalf of NU's policyholders, she sits on three boards as a non-executive director. One of those is Tullow Oil, the exploration company, whose remuneration committee she chairs. She now fires off a series of e-mails relating to this.
Tonight, though, Ms Spottiswoode is an evening off. "My second daughter and her boyfriend have invited the family over for dinner. All my three daughters have boyfriends so, along with my husband and son, there will be nine of us there to sample the cooking." Still, when she returns home, late, Ms Spottiswoode will still make sure she sends further e-mails related to her work. Holiday is obviously a relative term.
Name: Clare Spottiswoode
Job: Norwich Union Policyholder Advocate
Education: Cheltenham Ladies College; Clare College Cambridge, MA in Maths and Economics; Yale University (US), Mphil in Economics.
Career: 1977: The Treasury, working in economics forecasting.
1980: Set up Spottiswoode Trading importing cotton and silk products from Thailand.
1984: Sold Spottiswoode Trading and set up Spottiswoode & Spottiswoode, which created financial and secretarial software packages.
1988: Sold company but stayed on until 1990 when she left to have two more children although she lectures at the London Business School.
1993: Appointed by Government to run the gas regulator OfGas.
1998: Left to take up a series of non executive directorships.
2006: Appointed by NU to be its policyholder advocate.