Peter Wood likes being in control. The insurance entrepreneur who founded Direct Line insurance for Royal Bank of Scotland fell out with his masters in Edinburgh and quit. His relationship with Lloyds, which owns 70 per cent of esure, his latest venture, is proving equally prickly.
Sometimes abrasive, but effective and inspirational, he once described his business philosophy as “stop the committees and get on with it”. He recently accused the bank of misleading people in statements that gave the impression it had full control over esure. Indignantly, he reminded journalists that, as chairman and chief executive, he called the shots and, with his colleagues, owned 30 per cent of the business.
In February he said: “The days of being told what to do and reporting to people are gone. Let’s make it clear ... I have control.”
Surely, the obvious response to this outburst would be “Calm down, dear”, the well-worn slogan of Michael Winner, who fronts esure’s television commercials. Instead, the tension seems to have worsened, with Mr Wood understood to be lining up finance to buy out the bank’s stake. Penta Capital and Toscafund, both chaired by Sir George Mathewson, his former boss at RBS, are in talks to back the buyout. Neither Lloyds nor Mr Wood would comment yesterday.
Mr Wood founded the business in 2001 with HBOS, which was taken over by Lloyds this year. It specialises in offering car insurance to lower-risk customers and has branched out into specialist women’s car insurance with Sheila’s Wheels. The formula of memorable advertising and low costs — everything is done online or through call centres — has succeeded. The Surrey-based esure boosted profits from £14 million to £38 million in 2008 and has ambitious expansion plans. Its price might be £200 million to £250 million.
Advertisement
Mr Wood did it all before with Direct Line, but it rankles with him that he never took equity in the business. A profit-share arrangement earned him £50 million between 1985, when he founded the business, and 1997, when he left. Very respectable, but a fraction of the £5 billion-plus at which RBS’s general insurance businesses are now valued.
Mr Wood, 63, is at No 438 in The Sunday Times Rich List, with a fortune put at £120 million. He recently admitted to losing a few millions when RBS shares collapsed.
Raised in Surrey, he was destined to be a doctor, but those ambitions were ended when his father’s business crashed and he needed to earn a living. He got into computers and soon excelled in the unglamorous back-office parts of groups, including Schroders, Whitbread and Alexander Howden, the reinsurer.
He has two ex-wives, five daughters and loves Chelsea, red wine and Mercedes cars. He jointly owns The Dining Room, the Reigate restaurant, with Tony Tobin, the celebrity chef. He also owns 10.5 per cent of Hornby, the toy trains maker. Given his management philosophy, a deal on esure may be coming sooner rather than later.