prudential appointsceo of us operations after predecessor quits following the UK insurer's unsuccessful bid for american general
Prudential, the UK's second largest insurer, has chosen Clark Manning to run its US businesses. He replaces Robert Saltzman, who stepped down in June 2001.
Manning, 43, will be chief executive officer of Jackson National Life Insurance and Prudential Portfolio Managers America. He has been acting CEO of both units since June 2001 when Saltzman quit after Prudential's bid to acquire Houston-based American General failed in March. If the bid had succeeded, Saltzman would have been expected to relinquish his role to Robert Devlin of American General, who has since been replaced by Maurice 'Hank' Greenberg of AIG.
Prudential announced in March that it was attempting to buy American General, in what would have been the biggest foreign takeover of a US financial services company, as its Jackson unit was too small to compete.
American International Group in May agreed to pay $23bn in stock for American General, topping Prudential's $20.9bn bid. 'The problem with Jackson National is the crass error of justifying an acquisition that didn't happen,'' said Chris Hitchings, an analyst at Commerzbank Securities. 'That's why this has been a difficult post to fill.''
Prudential is seeking other purchases to expand its annuities business in the US, where more than one fifth of the people are aged 45-65. Even so, 'the big deal is over for them at the moment,'' said Andrew Crean, an analyst at Schroder Salomon Smith Barney.
Manning's appointment comes just one week after Prudential's decision to cut 2,100 jobs and sell its property and casualty unit to Credit Suisse Group to cut costs. Another 1,200 jobs will be transferred when Credit Suisse's Winterthur Insurance buys the property and casualty unit for £353m in cash. The reductions will affect the information technology, marketing and finance departments.
London-based Prudential has announced plans to cut about a fifth of its workforce this year as it focuses on boosting life insurance sales and regaining market share from rivals such as CGNU and Legal & General. Prudential aims to save £175m a year by 2004 through the latest cuts.
'Prudential's problem in the UK now is making sure it sustains sales growth,'' said Michael Wheelhouse, an analyst at Nomura, who has a 'hold' rating on the stock. 'That's a much bigger challenge.''
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