So solid Pru

11 March 2010 12:00 pm

It is difficult to put a price on a good brand but there is little doubt that it influences our actions on who we trust and ultimately who we buy from.

Understandably, the public relations team at Prudential has been full of sensitive souls during the past fortnight. A proposed Asian acquisition, a planned record rights issue, a volatile share price and being the subject of a takeover bid, will, I suspect, keep them chained to their desks day and night.

It is probably why they were less than enthusiastic about discussing the Pru’s links with the new Ricky Gervais film, Cemetery Junction, to be premiered in April. The film, set in the Seventies, centres on the exploits of a lad who
wants to “break out of the gutter” and decides to get himself a job as a door-to-door insurance salesman at the
fictitious Vigilant Life Assurance Company.

It was not always going to be called the Vigilant Life Assurance Company, of course. The film’s original working title
was “The Men from the Pru”. However, Prudential was less than keen to be associated with the film because it has a brand “to protect”. Its official line is that you do not see brand names in films and, after all, the slogan is its trademark. You can understand Pru’s concerns and why
it wants to distance itself from the new film.

Its direct-salesforce took most of the blame for its tarnished image in the wake of the pensions misselling scandal in the late 1980s and early 1990s. The scandal resulted in a £650,000 fine while the firm was forced to set aside £1.4bn to cover the costs of redress.

It is a tarnished image that the Pru has been working hard to eradicate ever since - and it has to be said it has achieved with some success. Almost two decades on, the Pru brand appears stronger than ever.

Not that it has been all plain sailing, of course. Egg, its foray into internet banking, was a disaster, as it was its venture into estate agency, while more recently it has pulled out of the equity-release market.

But its with-profits business has weathered the storm far better than most, thanks to the strength of its balance sheet, and the company has won over many IFAs.

One vocal Scottish IFA says: “It delivers its promise - being prudent and they have delivered good solid returns with integrity.” Another IFA adds: “As an insurance company, they have always struck me as one of the better ones.”

While another remarks: “It has been a long time since the Pru was a stodgy British institution. Over a number of years, they quietly re-invented themselves with a more global outlook.”

Pru’s acquisition of M&G in 1999 certainly proved a shrewd deal, with the fund manager firmly an IFA favourite again.

Pru shareholders have also had little to complain about until the financial crisis hit and, despite the recent falls, its shares are still 50 per cent higher than their 10-year low in 2003.

Financial services companies have a tough enough job when it comes to creating a brand and an even greater one protecting it. Just how tough is evident when you compare insurance brands with the other global brands such as Google, Microsoft, Coca-Cola and banks such as HSBC.

They do not score well - out of a survey of the top 500 so-called super brands in the UK, only one is an insurer and that insurer happens to be Prudential.

Being judged Britain’s best insurance brand is worth protecting and, I suggest, worth sacrificing any critical acclaim “The Men from the Pru”, sorry I mean Cemetery Junction, might get from film buffs such as Jonathan Ross.

Paul Farrow is digital personal finance editor at the Telegraph Media Group

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