Mack makes swift departure from United Assurance
United Assurance yesterday stunned investors by announcing the abrupt departure of George Mack, group chief executive. Andrew Verity discovers that other directors last week called a board meeting to discuss the future of Dr Mack, who took the helm of the group when it was formed from the merger of United Friendly and Refuge Assurance a year ago.
Tuesday 04 November 1997
In a statement, the company said: "With successful completion of the integration now approaching, Dr Mack has decided to pursue opportunities elsewhere.
"The board looks forward to appointing a new group chief executive to take the group forward from the excellent platform created by the merger." United Assurance said he had been in charge of the merger, which was now approaching successful completion.
While Dr Mack will not leave the company until the end of January, it is unlikely that United Assurance will be able to name a full-time successor for some weeks.
Headhunters were enlisted to search for a new chief executive soon after the board meeting took place. Analysts, however, believe that Mr Cudworth already had a candidate in mind while at the same time making sure that there were no better candidates around.
Analysts yesterday came up with a long-list of names to succeed Dr Mack. The list largely comprises a string of senior executives who have recently left top jobs in the life insurance sector. They include Jim Sutcliffe, chief executive of the Prudential's UK life insurance options until five weeks ago, and Steve Melcher, the American who formerly headed up Eagle Star Life, the BAT subsidiary.
Dr Mack has come under heavy pressure from investors in United Assurance who have been increasingly irritated by the group's slow handling of the merger.
Under the merger terms, 160 of 279 branches will be shut. A total of more than 2,200 employees, or a third of staff, will have lost their jobs by the time the restructuring is complete.
In the last 12 months, the group's share price has underperformed its sector of life insurance by 22 per cent. While new business is flooding into other life insurers, who are seeing rises of more than 20 per cent year on year, United Assurance's sales dropped by 5 per cent in the first six months of 1997.
Shareholders have also become irritated by a bungled attempt to venture outside United's core business of door-to-door collections of insurance premiums. One of the poorer expansion moves was the acquisition of United Friendly Financial Planning, which was bought from American Express in 1993 for pounds 14m and was recently sold to Friends Provident at a loss of pounds 2m.
This followed an earlier flop which saw United Friendly wind-down a motor insurance underwriter but fail to make enough provision for liabilities. The group has also doubled its provision for pension misselling to pounds 150m.
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