Outgoing Admiral chief signals he may stay on as part-timer

Admiral's founder Henry Engelhardt has indicated he will stay on at the FTSE 100 insurer despite disclosing plans on Wednesday to step aside as chief executive after 25 years, saying he "can't quite go cold turkey".

The American, who started Admiral in Cardiff with 57 people and turned it into the UK's second-largest motor insurer, also signalled he will retain his 12 per cent shareholding after he steps down a year from now.

In a further sign of continuity, Admiral has picked its chief operating officer David Stevens to succeed the colourful entrepreneur. The former McKinsey consultant has worked closely with Admiral's chief since they launched the insurer in 1991.

Explaining why now was the time to pass the reins to his old business school friend, Mr Engelhardt said: "You don't want to outstay your welcome."

"I won't stay on the board - that would be unfair to the next generation, to have me hanging over the edge," he said.

Even so, the 57-year-old added he may still have "parts of the business reporting to me" in a yet-to-be-determined role, possibly part-time executive. "I can't quite go cold turkey".

The announcement about his departure on Wednesday knocked 1.4 per cent off shares in Admiral to £14.42.

It prompted immediate questions about the insurer's strategy - particularly whether the group could change its approach to its underperforming international divisions, which include Italy and France.

Since Admiral launched its first overseas operation in Spain in 2006, the overseas ventures have been lossmaking overall.

"My main concern is everything outside the UK," said the chief executive of his past 12 months at the helm.

He does not expect the international businesses to break even, in aggregate, in his final year - partly because of the heavy investment in the US, which he described as a "potential gold mine".

"Part of it is just time," said Mr Engelhardt. "The businesses are using the techniques we use in the UK. Now they just need the experience and data."

"The strategy is always moving," he added. "We're very open minded. We don't have Soviet, 10-year-plans."

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Mr Engelhardt, a marketeer, has focused on running the international arm in recent years, while the more technically minded Mr Stevens - and fellow Insead MBA graduate - has assumed responsibility for the UK.

However, asked if Admiral would be any more likely to jettison underperforming businesses under Mr Stevens than he was, the outgoing chief said: "I don't think so.

"We're all comfortable with where the businesses are, and what their future holds. But if that changes, then attitudes could change."

Admiral's largest investor explained he had "no intenion" of selling down his shareholding, which is worth £485m, saying he could not find a better investment. "I have no immediate need for the cash."

He also played down the suggestion that his departure would make it any more likely Admiral could itself be sold. "Everything except my wife is for sale," he said, but added "not much has really changed" as a result of his move.

Paul Hewitt, manager at the corporate governance researchers Manifest, said some shareholders may raise an eyebrow if Admiral's founder exerted ongoing managerial influence. However, he added other investors would welcome the continuity.

"My instinct is you're more likely to have people with a glass-half-full perspective," he said.

In recent years, Admiral has come under pressure - because of falling premium levels in its fiercely competitive domestic market as well as the overseas losses.

Yet over the long term, it ranks among Wales's most flourishing companies.

Mr Engelhardt, who still meets each new employee in South Wales, puts the success of the business, which employs 7,200 people, down to its staff.

"If people don't get recognition they don't feel valued. If people like what they do they'll do it better."

"It surprises me how other businesses seem to be run."

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