Group Chief Executive, Prudential Public Limited Company
Born: March 23, 1954.
Education: Imperial College, London, FCA.
Family: Married; children: three.
Career: Arthur Andersen, joined company in 1974; 1991–1995, senior partner of European Insurance Practice; Prudential Public Limited Company, 1995–1999, group finance director; Prudential Public Limited Company, 1999–2000, deputy group chief executive; Prudential Public Limited Company, 2000–, group chief executive.
Address: Prudential Public Limited Company, Laurence Pountney Hill, London, EC4R 0HH, United Kingdom; http://www.prudential.co.uk.
■ Jonathan Bloomer took over as group chief executive of Prudential Public Limited Company (no relation to Prudential Insurance Company of America), the worldwide life insurance and saving-products company, just as the international economic downturn began in 2000. As a result, Bloomer, like many other insurance company executives, struggled to reverse a steady decline in profits and stock prices. While Bloomer successfully guided the company to the beginnings of a recovery in sales, he faced ongoing difficulties in turning around the company's profit margins. Industry analysts have noted that Bloomer's background in accounting made him well suited to lead the insurance company because of his ability to understand the numerous and complex financial and actuarial concepts involved in the insurance business.
After graduating from Imperial College in London, Bloomer went to work for the accounting firm of Arthur Andersen, where he first began to learn about the insurance business. He
worked on behalf of insurers in both the United Kingdom and Europe in the areas of acquisition reviews, strategic planning and structuring, and operations reviews and investigations. He also served as senior partner of Arthur Andersen's European Insurance Practice.
In 1995 Bloomer left Arthur Andersen and joined Prudential as group finance director. In May 1999 he was appointed deputy group chief executive and then assumed the post of group chief executive, or chief executive officer, on March 1, 2000.
After taking over as CEO, Bloomer immediately began to address Prudential's falling profits by attempting to take over the U.S. insurance company American General, thus adding to Prudential's U.S. subsidiaries, Jackson National Life and PPM America. Bloomer announced that he believed the companies would work well together because of their complementary business operations and similar strategies in broadening their product ranges and distribution channels.
Bloomer's efforts to purchase American General, however, fell through when the global insurance giant American International Group outbid Prudential for control of the Houstonbased insurance company. Part of the reason Bloomer's acquisition plans failed was that he had offered $26.5 billion in Prudential stock to acquire the company. However, Prudential's stock price dropped after the announcement because investors thought the offer was too high. This devaluation in stock price led to a decline in the deal's value by about $20 billion.
Bloomer's failure to acquire American General was somewhat tempered by a reported $600 million break fee paid by American International Group to Prudential to cover Prudential's expenses in attempting to make the deal. However, Bloomer once again angered shareholders when it was announced that he was in a position to make up to £4.6 million if the company met performance targets. At the very least he was scheduled to earn a bonus of £900,000 on top of his £600,000 salary. The stockholder outcry led Prudential's board to reassess the deal.
Bloomer continued to struggle with Prudential's declining profits, especially in the first half of 2002 when the company announced a nearly 50 percent decline in profits compared with the same time the previous year. Bloomer laid the blame for part of the decline on a $230 million loss on investments in U.S. corporate bonds. The company also suffered a steep decline in share prices.
Despite the setbacks, Bloomer announced that he was confident that Prudential would weather the global stock market downturn. He pointed out that the company's strategic expansion in Asian markets, including China, had resulted in a 27 percent increase in new business in these markets. The BBC News reported Bloomer as saying, "Our financial strength will enable us to continue to deliver growth in [the] future" (July 24, 2002).
Part of Bloomer's growth strategy was to continue to broaden the company's international markets and refine distribution approaches. The strategy appeared to be working in January 2003, when the company reported that insurance sales rose 12 percent and total sales for Prudential UK rose 6 percent. The improved performance was driven by sales of bulk and individual annuities, with individual annuity sales rising 39 percent. But Bloomer noted that the company expected to continue to encounter difficult market conditions.
By mid-2003 Bloomer once again angered shareholders when he cut the company's dividend by 40 percent. In a video interview on the Prudential Web site, Bloomer noted that he thought the dividend cut was a fair balance between future business investment and a shareholder dividend. He noted that the purpose of the dividend cut was "to ensure that we've got that balance and that we can invest for the future and we can grab those opportunities as they arise, as markets improve going forwards" (July 29, 2003).
Although Bloomer has been described by market analysts and colleagues as having a healthy ego, they add that his style is to keep a low profile and not to rub people the wrong way. This approach, analysts have noted, helps keep him and the company out of the sights of British Parliament members and regulators who have been examining many insurance companies. Bloomer is also known for his attention to detail.
Bloomer's management approach to foreign markets has been to stress the importance of establishing partners in countries where the company is not well known. He has emphasized recruiting local management who know the foreign markets best. Bloomer is also a strong proponent of investing in the insurance company's thousands of employees through training courses, especially online learning.
By January 2004 Prudential was showing a revival with a strong rebound in policy sales during the last three months of 2003. Although the full-year sales for 2003 slid 19 percent to £148 million, the October-to-December sales rose 10 percent compared with sales in the previous quarter. As many British financial services companies were coming under regulatory review, Bloomer noted in the Times Online that he expected Prudential to benefit "from savers choosing those companies with clear financial strength" (January 22, 2004). Nevertheless, the following month Prudential reported a 30 percent slide in fullyear profits. Bloomer was also having difficulty trying to sell Prudential's unprofitable online banking effort called Egg, which analysts noted would provide a £1.3 billion cash injection into the company. In addition to his role at Prudential, Bloomer has served as a member of Great Britain's Urgent Issues Task Force, nonexecutive director of Railtrack Public Limited Company, and deputy chairman of the Financial Services Authority's practitioner panel.
See also entries on Arthur Andersen & Company and Prudential plc in International Directory of Company Histories .
Ackman, Dan, "Top of the News: Transatlantic Insurer Merger," Forbes.com http://www.forbes.com .
"Profits at UK Insurer Prudential Take 30 Percent Beating," Knight Ridder/Tribune Business News , February 24, 2004.
"Prudential Interim Results," July 29, 2003, http://www.prudential.co.uk/prudentialplc/investor_home/presentations/?view=Standard&archive=yes .
"Red Tape May Trip Up Prudential Revival," Times Online , January 22, 2004. http://business.timesonline.co.uk/article/0,,8903-972959,00.html .
"Shareholders Revolt Costs Man from the Pru Pounds 4.6m," Times (London), May 9, 2002.
"Stock Market Woes Hit Pru Profits," BBC News , July 24, 2002.