Company Of The Week

Click to follow
The Independent Online
Prudential, Britain's largest life insurer, said it will start selling financial services by telephone, internet and mail, trying to match successful direct selling businesses already being run by rivals.

The new initiative, called egg, marks the end of the "man from the Pru", who sold the company's products door-to-door. The new service is due to start today, creating 1,500 jobs over three years. The company estimates it will cost pounds 150m over the next two years to set up egg, with a small profit expected in 2001.

The move follows successful innovation in selling financial services direct to consumers down the phone by the likes of Direct Line and First Direct.

"It will become a much more important distribution channel than it is at the moment," said Robert Mumby, an analyst at Credit Suisse First Boston.

Eamonn Flanagan, analyst at Charterhouse Tilney Securities, said the move would probably end speculation that Prudential will buy a rival in the financial services industry. "This is sending the signal that they're going to do it their own way," said Mr Flanagan.

There was talk that Lloyds TSB and Prudential were gearing up for an pounds 8bn bidding war should members of Nationwide Building Society decide to shed its mutual status. Prudential has also been tipped to buy Woolwich and to merge with Barclays.

Prudential said it would provide savings accounts, mortgages and personal loans through egg, which is aimed primarily at younger, "technologically friendly" customers.

The service will be available seven days a week, 24 hours a day. Prudential said private research had shown that by the year 2013, two out of three financial products would be sold electronically. "Over time, it will grow to add substantial value for the corporation," said finance director Jonathan Bloomer.

Comments