L&G tipped to look inside for successor as Prosser prepares to step down early

Click to follow
The Independent Online

David Prosser, the chief executive of Britain's third-largest listed insurer Legal & General, is preparing to step down early, paving the way for the job to go to an internal candidate.

David Prosser, the chief executive of Britain's third-largest listed insurer Legal & General, is preparing to step down early, paving the way for the job to go to an internal candidate.

The life insurer, said yesterday it would name a successor to Mr Prosser before the end of the summer, opening the door for him to leave ahead of his proposed retirement date of March 2006.

Speaking at the group's annual meeting, Rob Margetts, the chairman, said search was well under way.

Investors are expecting the successful candidate to come from within L&G, with Andrew Palmer, the finance director, Tim Breedon, group investments director, and Robin Phipps, the head of UK operations, believed to be the front runners.

However, Mr Margetts said that the company would not rule out making an external appointment. "We have a pool of excellent managers within our business from which to select the new CEO, but we have thought it right also to look outside ... so we will know we have looked at the very best people available."

Externally, Mark Wood, the head of Prudential's UK business, is believed to be among the strongest candidates. Mr Wood is believed to be keen to leave the Pru, having been passed over in the hunt for a new group chief executive earlier this year.

L&G also reported bumper first-quarter results yesterday, unveiling a 43 per cent rise in world-wide sales to £307m, obliterating analyst forecasts of £248m.

Although all parts of the group's business were substantially up compared with the first quarter of 2004, the biggest increases came in sales of UK individual life and pensions products. Sales of with-profits bonds continued to decline, down more than 50 per cent on the same time last year.

However, sales of unit-linked bonds more than compensated, increasing by 66 per cent. Sales of Isas fell, but overall unit trust sales were up sharply, boosted by a one-off restructuring of Barclays' investment fund business.

L&G said earlier this year that they were targeting growth of about 15 per cent this year - 10 percentage points greater than the anticipated growth in the market. Mr Prosser said that a strong set of first-quarter results did not necessarily change these targets. "Although we've done better in the first quarter, we're still aiming at the moment to do about 10 per cent better than the market for the year."

On Tuesday, L&G had the final day of its Financial Services & Markets Tribunal hearing against the Financial Services Authority. The insurer is claiming some £2m in legal costs. Mr Prosser said he expected to hear a decision in about two weeks, adding that he believed Tuesday's proceedings had gone well for the company.

After 14 years at the top

* David Prosser joined Legal & General in 1988 and, after 14 years in the top job, is now one of the longest serving chief executives in the UK.

* Speaking at yesterday's annual meeting, Rob Margetts, the company's chairman, reminded investors that during Mr Prosser's time at the helm, shareholders have seen a 400 per cent total return, compared to less than 200 per cent in the FTSE 100 as a whole.

* Perhaps the highlight of Mr Prosser's tenure - with the benefit of hindsight - came two and a half years ago, when he raised £786m through a rights issue.

The move shored up the group's capital position at a time when falling markets were putting many of its rivals in danger of breaching their solvency ratios.

* Although Mr Prosser would be an obvious candidate for chairman, he has insisted that he would not want to fall foul of corporate governance guidelines and will not be stepping up to the job.

Comments