Troubled insurer Britannic loses second chief after just 9 months

Britannic Group, the troubled insurer that only escaped insolvency earlier this year by scrapping its dividend and policyholder bonuses, is set to lose its second top executive in 18 months with the resignation of Bryan Portman.

Mr Portman, 54, has been in the top job at Britannic for just nine months after being promoted from finance director to managing director last September. Yesterday it emerged that he is handing over the top job to the company's current finance director Paul Thompson next month.

Until Mr Portman's appointment, Britannic had been without a chief executive for nine months after the sudden departure of Danny O'Neil in January 2002. Mr O'Neil, a former head of Britannic's asset management division, left after only seven weeks in the chief executive's job, saying he wanted to spend more time with his young family. Harold Cottam, who has been chairman of the company since 1996, stepped in to become executive chairman before Mr Portman was appointed as managing director.

Mr Portman has been under pressure to turn around the group's performance, which has been poor for some time. Its operating profits slumped 41 per cent in 2002. Only a month after becoming its managing director, Mr Portman was forced to issue a profits warning that halved Britannic's stock market value in one day. Shareholders were left reeling after he warned that Britannic would not pay investors a dividend for 2002. Its 1 million with-profits policyholders were also told they would not receive annual bonuses for last year.

This drastic action was prompted by the continued slide in the stock market, which had stretched Britannic's solvency margins to the limit and left it with a wafer-thin cushion of capital above its regulatory requirements. In March, Mr Portman was forced to close Britannic to new with-profits business in an effort to conserve capital. Its shares hit a low of 101p in January, making the company worth £196m. The group has an embedded value, however, of more than £900m, making it a takeover target for a rival player keen to snap up assets on the cheap.

In 2001, the company axed its 1,600 strong door-to-door salesforce because it had become too expensive to run and put itself up for sale. No buyer was forthcoming and the for-sale sign was withdrawn in July last year. Britannic has since struggled to make up the lost revenues from axing its salesforce and recover from the falling equity markets that ravaged its funds.

Mr Thompson will take over as chief executive in July, although Mr Portman is expected to stay on until September to ensure a smooth transition. Mr Thompson, 40, joined Britannic last December from the investment bank, Merrill Lynch, where he had acted as an adviser to Britannic during its attempted sale. The company is now understood to be searching for a new finance director.

Sentiment towards the company has improved in the past few months, as the stock market has recovered and investors have warmed to the actions taken by Mr Portman to tackle the group's financial problems. Fears that the company is insolvent have eased and the company is currently in talks with the Paragon group to sell Paragon its mortgage business, Britannic Money. Its shares yesterday closed up 1p at 246p.