Outlook: The Pru loses an original

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The Independent Online
Even today, the resignation of such an important City figure as the Pru's chief executive is a pretty seismic event. Ten years ago it would have registered force 10 on the Richter scale. Add to that the total lack of any adequate explanation for his going, and to the outside world it begins to look as if Britain's leading life assurance company must be in a state of disarray and chaos. Whatever the immediate reasons for his departure, Mick Newmarch will go down in City history as the man who was right at the wrong time. He said in speech after speech that the Personal Investment Authority, the regulator set up to combine the jobs of the old Fimbra and Lautro, was an unsatisfactory hybrid. On the Newmarch view, when the chips are down, self-regulation and self-interest can too often be synonymous. They may lead to an unholy mess from which nobody gains and from which the industry suffers because it is doubly blamed for failures in service towards customers.

Better therefore to make regulation a clear government responsibility, which means in the case of the PIA that it should have direct statutory powers. At present, it is a junior regulator, with powers delegated to it by the Securities and Investments Board. Mr Newmarch stood out to the last against joining the PIA as other opponents caved in, leaving the Pru forced to ask for direct regulation by SIB.

But like all originals, Mick Newmarch did not know when to stop. There was little point in being the lone outsider. He should have given in gracefully when all his allies deserted him.

Likewise, he battled for months on a pointless campaign to prove that the Pru was not being investigated for misselling of pensions, when the fact was that an informal investigation was under way. Mr Newmarch relied on the fine distinction between formaland informal to prove his point.

The full story of his abrupt departure has yet to emerge, but these lost battles are important clues to his character. Back to the wall, fed up with other people's weak compromises, he could very well have decided enough was enough and walked out.

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