CEO Thiam leaves Prudential

The popularity of a chief executive can often be gauged by the share price response when they announce their departure. Insurer Prudential's full-year results were fine, so the 6% slump in its shares first thing Tuesday can only be explained by Tidjane Thiam's decision to head off and run Swiss investment bank Credit Suisse.

How times have changed. I remember watching a very contrite Thiam sit through an AGM at The Queen Elizabeth II Conference Centre in 2010, not long after a $35 billion takeover of AIG's Asian life insurance arm fell through. Shareholders were understandably furious about £450 million of costs - later reduced to £377 million - accumulated during the bid process.

Chairman Harvey McGrath lasted another 18 months, but Thiam survived to repair his reputation - current chairman Paul Manduca calls him "one of the most exceptional leaders in Prudential's long and illustrious history". He'll attend his final AGM as CEO shortly after May's first-quarter results.

Deutsche Bank believes any sell-off will be temporary.  "Prudential has management in depth... specifically each of the group's divisional CEO's are strong enough to be group CEOs in their own right," it says. A successor has already been identified, says the Pru, and will be announced "shortly". Gossip is it's Mike Wells, currently head of US arm Jackson National Life Insurance. And that meets with the Deutsche's approval.

"We think the market will be content with this appointment... he is well respected, has done a good job in the US; however, it does suggest that Prudential will remain wedded to its US business, which should diminish the power of any breakup stories (which have in any case been pretty quiet recently)."

Whoever is confirmed will have a lot to live up to. "We continued to grow across our key metrics despite the challenges presented by historically low long-term interest rates in the US and the UK, major currency discontinuities in some of our key Asian markets and unprecedented regulatory changes in the UK life market," explains Thiam

And the numbers were largely ahead of City consensus estimates. IFRS (accounting standard) operating profit jumped by 14% in local currencies to £3.19 billion, European embedded value (EEV) new business profit grew by a tenth to £2.13 billion, and cash flow rose 9% to £2.58 billion. All were better than forecast.

Despite regulatory change, the UK life business made £752 million in 2014, 7% more than the year before. In Asia, the life portfolio grew by 16% to £1.05 billion, new business rose 13% and sales via a distribution partnership with Standard Chartered leapt by a third. In the US, Jackson increased profit at the US life business by over a fifth to £1.43 billion as higher levels of separate account assets generated extra fee income.

"At first sight the results look clean," says Deutsche, which was also surprised by a 10% increase in the dividend to 36.93p, a penny more than expected. "We would look to buy on any weakness."

Ahead of the results, the broker had pencilled in adjusted EPS of 111p for 2015 and dividend increase to 42.4p.

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