The Interview: The insurance entrepreneur soon to be knocking at the FTSE 100's door

Clive Cowdery Chairman elect of new Resolution Life Group
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The Independent Online

Not much is known about Clive Cowdery's early life but in the past decade he has made the journey from relative obscurity to full-blown stock market superstar status.

At 42 he is about to become one of the youngest chairmen of a UK-quoted company, one that will be knocking on the door of the FTSE 100 soon enough, and his latest venture should easily net him £70m.

If you think that starting a private company in January 2003 and bringing it to the stock market two years later through a multibillion-pound merger is quick work, Mr Cowdery was actually rather taken aback at first at how long it took to get his idea off the ground.

"I cringed with embarrassment the other day at one of my early business plans which said I would do my first deal in July 2003. It actually took another year to do that."

Mr Cowdery is in insurance. However, before you turn the page, tarry a while. Be reassured that when they made this former West Country policy salesman they broke the mould. An iconoclast, he delights in telling it like it is, making gnarled old PR minders wince - always a pleasure to see - and is a joyous departure from the normal pack of insurance executives who all too easily comply with the grey old cliché of their actuarial roots.

On Thursday he unveiled the merger of his Resolution Life business - established in 2003 - with the Birmingham-based Britannic Group - established in 1866 - to create an insurance giant which will be worth more than £2bn once its shares start trading on 4 July.

Nothing, it seems, is out of reach. Having now made his fortune he hints at a social conscience by extolling the need to find realistic ways of persuading the less well-off to save. But Gordon Brown, a chancellor used to the plaudits for his unification of the benefits and tax system, has got it wrong as far as Mr Cowdery is concerned. "The current allocation of tax credits to encourage savings is clearly barking mad," he says about a topic he obviously thinks a lot about and keeps returning to.

But first, the past. He left school with an unspecified number of O-levels, went without A-levels and bypassed any sort of university.

"I did voluntary work in America," Mr Cowdery says rather vaguely about a time in his life which is a bit of a mystery.

By his mid-twenties he had fetched up in Cornwall and joined an insurance brokerage. His first marriage produced five children, his divorce and subsequent second marriage has now added one more to his progeny.

But the deal he announced on Thursday was not his first. Having sold insurance - to relatively poor people which is an interesting issue for me - he then started thinking up all sorts of clever policies that people seemed to need.

His innovative streak marked him out to some of the more entrepreneurial figures in the industry and he ended up running the Dublin-based offshoot of an insurer started up by Jacob Rothschild. That business was eventually bought by the Prudential in 1997 and, thanks to his management stake in the company, he made "a few million".

But he wasn't happy and the restless Mr Cowdery knew his rather unorthodox background meant there were gaps that would hinder his progress.

"Being an entrepreneur is fine and exciting but it doesn't expose you necessarily to best practice. I wanted to go back to school."

Not for him the predictable Ivy League MBA. "I decided to get a corporate education". So he found himself learning about companies from probably one of the 20th century's masters - Jack Welch, whose General Electric empire included a hotchpotch of European insurance businesses that Mr Cowdery was happy to sort out.

"I told myself that I would be there three to five years and then I would be educated. I left after four."

So is he now happy about chairing a big public company with the glare of publicity that goes with it? A rather self-conscious grin spreads out across his face before he remembers his lines. "The role of chairman carries with it corporate governance duties. I'm very grateful to Malcolm Williamson [chairman of Britannic] for staying on as deputy chairman of the merged group. The public company world is one he knows more about than I do."

Anyway, he left GE not to look after one of the grand old dames of insurance, such as Prudential, but rather he headed for the esoteric world of closed life funds.

In the Seventies and Eighties there was an explosion of mainly mutual insurers selling savings schemes, which included life insurance, to pay-off mortgages or to simply provide people with some savings. Competition got fiercer and fiercer, the bonuses that were paid on the policies got higher and higher and the performance league tables got hotter and hotter.

Sadly the early Nineties slump put paid to the ever-rising bonuses and meant policyholders quickly got sceptical about these with-profits policies. The plethora of insurers soon realised they weren't going to sell many more. But increasingly hawkish regulators required them to tie up lots of capital to back their liabilities and because they were often quite small, these companies were left with little choice but to close their life funds to new business and find something less capital-intensive to do.

But policyholders' premiums still keep coming in. Somebody has to be paid to administer them and paid to invest the money. The bigger you are, the more efficiently, and profitably, you can do these functions, which is why Mr Cowdery wants to buy up the stub of the life insurance industry and take charge of it.

These assets have come on to the market for less than the value represented by the future cash flows coming from premiums. This creates a ready-made surplus for the buyer.

What is more, the scale of these funds is fantastic so just a few percentage points translates into hundreds of millions of pounds.

"There is £200bn of assets tied up in closed funds and of this, our new group has £40bn, so even the largest player has only 20 per cent of the available assets," Mr Cowdery says.

But, of course, looking after existing policies does nothing to get people saving more into new policies, a subject vexing politicians such as the Chancellor, and one Mr Cowdery's more sensitive colleagues want to stress has nothing to do with them or their company.

Thankfully, this does not worry Mr Cowdery. He starts with the demise of the home service sales forces epitomised by the man from the Pru.

"Over-regulation of sales forces hasn't worked, less people are buying policies. It's not lowered the cost to somebody who bought a home service policy; it's removed the opportunity to buy a home service policy at all, at any cost."

Then comes the Chancellor's "barking mad" allocation of tax credits. "Of £20bn given in tax credits, £6bn goes to higher rate taxpayers who would save anyway. Call that progressive taxation?"

Finally the structure of the welfare and benefits system is such that it acts as a disincentive to save for many poorer people, according to Mr Cowdery.

The prospect of Brown versus Cowdery across the Dispatch Box is one to make any parliamentary sketch writer lick his pencil in anticipation, should the Resolution man ever resolve to enter politics.

Meteoric rise

Age: 42

Pay: £360,000

Career: After working as an insurance salesman from the mid-80s he founded J Rothschild International Assurance in Dublin in 1992. That was ultimately sold to the Prudential. Joined GE Insurance Holdings in 1998 and left in 2002. Set up Resolution Life in January 2003

Education: Left school with a few O-levels

Personal life: Twice married, six children. Reads a lot, novelists such as David Lodge and Malcolm Bradbury

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