Prudential appoints Tidjane Thiam as new Chief Executive

Prudential appoints Tidjane Thiam as new Chief Executive

Prudential has revealed that current chief executive Mark Tucker will be replaced by chief financial officer Tidjane Thiam as the insurer announced a rise in full-year profits bucking the trend of the challenging global economic and financial markets.

Tidjane Thiam, will become the first black boss of a FTSE 100 company, he will take over as chief executive on 1 October when Tucker steps down after four and a half years at the helm.

The group also admitted today that it had pulled out of a bid for the Asian business of troubled American Insurer AIG.

46 year old Thiam was hired from rival Aviva less than a year ago, having worked for consultancy firm McKinsey & Company previously.

“Tidjane is ideally equipped to succeed Mark, given his global experience, knowledge of the sector and his outstanding leadership qualities. We are delighted to have such an outstanding and proven successor in Tidjane,” said chairman Harvey McGrath.

Prudential said it was “very sorry” to see Tucker leave, who it said transformed it into the strongest company in the sector. Tucker did not give a reason for stepping down but said choosing to leave was one of the hardest decision of his life.

Shares in the group soared as EEV operating profit rose 17% to £2,961m and IFRS statutory operating profit increased 12% to £1,347m. New business profits increased 8% to £1,307m, while IFRS shareholders funds came in at £5.1bn (2007: £6.1bn).

However, Prudential swung into an annual loss of £396m from profits of £947m last year after taking £1,783m charge for short-term fluctuations in investment returns. Pre-tax losses came in at £2,074m from £1,058m on sales that rose 5% to £3,025m.

It has IGD surplus of £1.7bn (2007: £1.9bn), which will increase by £800m from the transfer of its Taiwan business to China Life.

In a conference call, Tucker admitted that Prudential had pulled out of a bid for AIG’s Asian business. "On AIG, we did not submit a bid in the process. Our view was that we could not get to the value criteria that we had in place,” he said, adding that the group was continuing to look at possible acquisitions.

Its debt portfolio on an IFRS basis was approximately £95bn at 31 December 2008. Total defaults experienced for shareholder backed business on the book in 2008 were £174m (0.4 per cent of the portfolio).

Jackson recorded impairment write-downs and credit related losses of £624m in 2008.

IFRS write-downs excluding defaults for the year were £419m, an increase of £228m in the fourth quarter of 2008.

“It is clear that 2009 will be a challenging year. Indeed, there is an increasing likelihood that in some parts of the world recession will continue into 2010. However, the global economy will ultimately rebound - albeit at different times and different speeds in different markets,” said the group.

Full year dividend increased by 5% to 18.90 pence per share.

Tags: Prudential Insurance, Tidjane Thiam, Mark Tucker