Sir Denis Mountain Bt
Shrewd chairman of Eagle Star
Friday 06 January 2006
Denis Mortimer Mountain, financier: born 2 June 1929; chairman and managing director, Eagle Star Insurance Co Ltd 1974-85, Eagle Star Holdings plc 1979-85, honorary president 1985-93; succeeded 1977 as third Bt; chairman, Australian Eagle Star Insurance 1977-85; chairman, South African Eagle Insurance 1977-85; chairman, Eagle Star Insurance of America 1978-85; married 1958 Fleur Kirwan-Taylor (died 2004; two sons, one daughter); died 24 October 2005.
Sir Denis Mountain was a distinguished member of the last generation of the traditionalists who used to control the "commanding heights" of the City of London. Like the best of the breed he combined shrewdness with firmness and calm under pressure, qualities which were shown to their best during the 10 years after 1974 when he inherited the chairmanship of the family insurance group Eagle Star.
In the early 1980s he fought a doughty - and sometimes stoutly nationalstic - battle to prevent Eagle Star from being absorbed by its giant Geman competitor Allianz. Eventually he allowed Eagle Star to be taken over by the tobacco group BAT at a price nearly a third higher than Allianz's first offer.
Eagle Star had been created by Sir Denis's grandfather Edward, the son of a hop merchant, who had started as an insurance clerk before the First World War on a mere £20 a year and moved to Lloyd's as a broker. In 1904 he founded a company called British Dominions Marine Insurance and greatly expanded it, moving into fire and motor insurance, sectors which remained mainstays of the business for over 70 years.
Edward Mountain was an aggressive deal-maker and innovator - he even created an all-female department to deal with women customers. In 1916 he bought three life insurance companies, the Eagle, the Sceptre and the Star, the last two both associated with the Methodist Church. He was created a baronet in 1922 and changed the name of the group to Eagle Star in 1937. Denis Mountain was fond of his grandfather and to the end of his days could remember being taken fishing by him as an eight-year-old and how the old man would have himself carried to the banks of his beloved Tay after losing the use of both his legs.
Edward's son Brian inherited the title and the business on his father's death in 1948 and continued to run the group in the same paternalist pattern as his father. Denis, his eldest son, was educated at Eton, where he learnt to box. He retained the habit while doing his National Service in the Royal Horse Guards, serving on the western side of the Iron Curtain in Germany. On his return to civilian life he started work - as a post boy - for Eagle Star but soon left to join Gardner Mountain, a firm of Lloyd's brokers in which his family had a stake.
Mountain soon made a name for himself in the tricky marine insurance market, his grandfather's original business, and became a director in 1956. Three years later, while still under 40, he became a non-executive director of the family firm and a full-time director in 1965. This was not so much due to the influence of his father as to that of the leading Ciy financier Harley Drayton, a substantial shareholder in Eagle Star.
In 1967 he became managing director, and although not a master of the technicalities of the business showed his qualities as leader of a group of talented executives, some of the most entrepreneurial in the whole sector, notably investing even in the United States. Nevertheless he must share responsibility with his father for some of the firm's unwise investments during the great "Barber boom" of the early 1970s in which so much of the City became over-committed to dubious financiers and property developers. Eagle Star suffered badly from the great crash of 1973-74. Eagle Star's worst loss came when the Bank of England had to invest £500m to support Drayton's old firm, United Dominions Trust, as well as £50m in London and County Securities, a property company with which Eagle Star was also deeply involved.
In 1974 the crisis led Sir Brian to retire in favour of his son and Denis Mountain inherited the baronetcy when his father died in 1977. In 1981, just seven years after he had taken over, Mountain was confronted by a crisis when Allianz, the enormous German insurance group, bought a 30 per cent stake in Eagle Star. He refused to allow the Germans the places on the board to which they were entitled because of the size of their stake - pointing out that they would not have welcomed such an intrusion by a British firm.
Two years later Allianz mounted a full-scale takeover bid, the first such attempt by a German firm since 1945. In the gentlemanly, deeply nationalistic City of the early 1980s this provoked a massive reaction. Mountain always claimed that he had grown fond of Germans while serving in Germany during his National Service but the company's real feelings became clear when models of Second World War German tanks and planes were handed out at a pre-Christmas lunch.
Fortunately for Eagle Star's shareholders Mountain was able to find a friendly alternative in a bid from a "white knight", the tobacco giant BAT, which was anxious to diversify into financial services. BAT won after a bitter battle in which Allianz's bankers, Morgan Grenfell, were accused of questionable tactics.
Mountain's major consolation was that BAT had to pay £968m for a business originally valued by Allianz at £688m. But he was totally unable to fit in to the more structured environment of a major group, objecting particularly to the end of the informal style to which he had been accustomed, the endless memos and flow of new ideas; at one point he wondered if Allianz might have been a better fit feeling - almost certainly unrealistically - that the Germans would have left his management style in place. But Mountain did not leave the business entirely until 1985 and then only as a result of poor health. He lived long enough to see the family businesses submerged as the subsidiary of the Swiss Zurich Insurance Group responsible for general insurance.
Mountain spent the last 20 years of his life indulging his taste for sporting activities - he always claimed that they helped him to keep cool under pressure, though he did have bouts of spectacular bad temper. He often went shooting big game in Africa, bringing back the trophies to the family home in Hampshire; when it burnt down he moved to a smaller house on the estate. He also lived on the family estate on Speyside, where he was chaiman of the Spey River board and bred a champion herd of Simmental cattle.
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