Given his position at the helm of Prudential's £70bn with-profits fund, there is a sweet irony in Prudential UK's chief executive Mark Wood having a father who produced paper for the printing of bank notes.
Under Wood, the Pru has undergone a radical reorientation in the last year, from a company whose closure of its direct salesforce removed one of the cornerstones of British identity and social history to a company that essentially focuses on higher-net-margin business sold with independent financial advice.
Wood emphatically rejects the idea that, under him, the Pru's distribution strategy and product line-up is defined more by what it will not do rather than what it will. “I do not agree with the analysis that our long-term strategy has been unclear. I think we have been a lot more explicit about our long-term strategy than nearly all our competitors,” he says.
Pru will play to its strengths with its annuities and with-profits bonds. In the event of depolarisation, Wood believes that many distribution deals will be done on a best-of-breed basis, in which case he is confident that a focused strategy will pay dividends.
Wood also denies any lack of commitment to the pension market but says the Pru has concentrated on bigger schemes, which is where it can see money being made. The Pru is open in its belief that other companies are writing uncommercial business. Wood smiles wryly at the suggestion that he is standing back and watching competitors such as Standard Life and Norwich Union slug it out over stakeholder and do each other damage. He believes the economics for single stakeholder and group stakeholder for smaller companies simply do not add up without compulsion.
Many people in the industry are asking in puzzlement what the Pru got out of its purchase of Scottish Amicable, after getting rid of most of its staff, shutting down virtually all its functions and rebranding the dregs that remain. Wood's answer is quite clear – ScotAm gave the Pru IFA distribution capability.
Wood blushes at the mention of his nickname, Chopper Woods. He ascribes it to his Axa days and “journalistic licence”. During his stint at Axa, Wood oversaw the merger of Sun Life and Axa Equity & Law, which saw many lose their jobs. The controversial distribution of Axa's orphan assets also took place under his aegis and many are waiting to see the outcome of Prudential's interminable discussions with the FSA over its orphan assets.
Wood speaks with an amiability and directness that confounds his reputation. Brought up in Darlington, County Durham, he now lives in Chelsea. He and his wife have three children, a teenage son and daughter and a 21-year-old daughter studying “cocktails and clubbing”.
Early this year, he was embroiled in fatcat accusations when remuneration packages of eye-watering proportions for group chief executive Jonathan Bloomer and himself had to be abandoned ahead of the Pru's AGM through shareholder pressure.
Wood responds to the fatcat accusation with an air of composed resignation. He says the package was based on the company meeting some very ambitious performance targets and was fully in line with practices in other industries. Nevertheless, the Citroen 2CV he says he drives with much pleasure is unlikely to be as a result of having no money.
Wood's responsibilities take in Europe as well as the UK but he sees little promise in the EU's declared aim of a single market for financial services by 2005. He believes there will be very few economies of scale and it would require tax harmonisation of the member countries to be meaningful. However, developments in Pru's European operations will be felt in the UK.
While Wood believes his strategy is CP121and Sandler-proof, the jewel in the company's crown – the Prudence Bond – will have to meet the challenges of Sandler's recommendations. Declaring himself to be supportive of with-profits reform, he says: “With-profits is not a particularly helpful name.”
In a sign of the propaganda battle that could ensue in the wake of Sandler's proposals for different rules for mutual and proprietary companies, Wood says: “The mutuals could also present an issue in the reform of with-profits.” He mischievously suggests it is ironic that a mutual's with-profits offering could be the higher-risk product.
He says any changes to the Prudence Bond would follow the format of the Pru's European Vie Bond. “This is very much the model going forward,” he says. The Vie Bond is a translation of the Prudence Bond for the French market. Apart from being denominated in euros and having a charging structure adapted for the local market, it is a 100/0 fund, where there is an annual management fund from which shareholders derive profit, as opposed to the current 90/10 structure of the Prudence Bond.
Do Wood's responsibilities keep him up at night? “No, I am too tired by the time I get to bed,” he says. But Wood clearly relishes the turmoil the industry is undergoing and believes he has picked a winning strategy. He says: “The present time is the most exciting in the 30 years I have been in financial services.”
Born: July 25, 1953 in Darlington, Co Durham
Lives: Chelsea. Married with three children
Education and qualifications: Degree in economics from Cambridge College of Arts and Technology, now Anglia Polytechnic University
Career to date: Qualified as an accountant with Price Waterhouse; subsequently with MAI in New York, Barclays and Commercial Union; managing director of the AA's insurance and financial services businesses; 1997 became chief executive of Axa UK; June 2001 appointed chief executive of Prudential UK & European insurance operations
Career ambition: To continue to be chief executive of Prudential UK
Life ambition: “I am not sure I have one”
Likes: Tennis, golf, classical music and jazz
Dislikes: “Questions that make me sound stupid”
Peers say: “You know where you stand with Chopper. He is very focused. There are no soft touchy-feely messages but blunt, broad strokes – not that it's any consolation for those that have been chopped”
Car: Citroen 2CV and a 27-year-old MG