Former Treasury man Kingman to chair Legal & General

Legal & General announced the appointment of a new group chairman on Tuesday, confirming former Second Permanent Secretary of HM Treasury Sir John Kingman as taking the up the post.

The 47-year-old comes with no previous experience in operating an insurance firm, but he did play a major role in the bailout of RBS, Lloyds and Northern Rock during the 2008 financial crisis.

Its board said the appointment follows a “thorough and exhaustive process” conducted by the nominations committee, with the assistance of a leading executive search firm.

Kingman is succeeding Rudy Markham, who began the search and appointment process for the new chairman whilst senior independent director, and has served as interim chairman since John Stewart’s retirement from the board on 1 June.

It was concluded by Julia Wilson, who became senior independent director at the company’s AGM on 26 May.

“Sir John Kingman has had an extensive Whitehall career, culminating as Second Permanent Secretary of HM Treasury, where his responsibilities variously included serving as managing director of the Finance and Industry Directorate, and managing director of the Public Services and Growth Directorate” the board said in a statement.

It added that he was also the CEO of UK Financial Investments, with responsibility for managing the state shareholding in Lloyds Bank, Royal Bank of Scotland and Northern Rock.

The board said he has also spent time as a managing director in the private sector, at NM Rothschild, where he was global co-head of the Financial Institutions Group.

“John's grasp of complex financial markets was a hallmark of the UK government's successful handling of the 2008-2009 financial crisis,” said Legal & General interim chairman Rudy Markham.

“This, plus his commitment to growth in the UK economy, will stand him in good stead at Legal & General as the UK navigates Brexit and as we continue to support economic growth which benefits our 10 million customers.”

Julia Wilson added that Kingman’s experience and leadership expertise operating at some of the most senior levels in finance complement the broader financial and operational skills of our board.

“Legal & General is a great company,” Kingman himself commented.

“I am delighted to serve as its next chairman, helping to generate value as part of a strong team and applying our collective skills on behalf of our shareholders and customers.”

The FTSE 100 firm said the appointment has been approved by both the financial regulators, and is subject to the advice of the Cabinet Office Advisory Committee on Business Appointments.

Company talks up strength in wake of referendum

The insurance giant released a separate statement on Tuesday morning, in the wake of Friday’s shock vote by the UK to leave the European Union.

Legal & General’s board said that in light of the significant market volatility, it felt the need to update the market on its balance sheet strength - specifically its Solvency II ratio, credit portfolio, derisking actions and providing cash generation guidance for the half year.

“Our Solvency II surplus is £4.9bn, we expect our net cash for half year 2016 to be up 15% and we run an 'A minus' rated credit portfolio of £44.8bn,” the board said in a statement.

“Legal & General's central planning scenario, ahead of the Referendum, was for a 50-50 probability of a vote for the UK to leave,” it added.

The board said it positioned the balance sheet accordingly to reduce risk for customers and shareholders, and undertook a number of derisking actions in respect of its asset portfolios, including the traded equities held with its shareholder funds, before the referendum to mitigate the balance sheet against the downside risk of a ‘leave’ vote.