Peter Wood (businessman)

Peter Wood, CBE (born Surrey, c.1946) is an English entrepreneur, most notable as the founder of the Direct Line and Esure insurance companies.^[1] He is the 438th wealthiest person in Britain with a personal fortune of £120 million, according to the Sunday Times Rich List 2009,^[2] and his repeated successes in the past twenty years have accorded him a "legendary" reputation within the insurance industry.^[3][4]

His ascendency began with Direct Line, the first telephone-only insurance company in the UK when it was launched in 1985 by Wood and Martin Long.^[5] The venture was underwritten by the Royal Bank of Scotland, and was so successful that within nine years it had grown from nothing to become the biggest insurer of private vehicles in the country,^[6] claiming three times as many customers as the Royal Bank itself.^[7] Wood did not have a capital stake in Direct Line,^[3] having sold it to the Royal Bank in 1988 in return for a generous performance-related remuneration.^[8] It proved to be a prescient deal, as the company's rapid rise led to his becoming Britain's highest paid company director, receiving £1.6 million in 1991, £6 million in 1992, and £18.2 million in 1993.^[8] The subsequent attention and notoriety his pay attracted—Labour Party MP and then-shadow Trade Secretary Robin Cook called his bonus "obscene"^[1][9]—was a source of embarrassment both to Wood himself and the Royal Bank, who attempted to buy their way out of their contractual obligations with a one-off £24 million payment in 1994, taking his total income that year to £42 million.^[8][10] Wood himself claims that he personally requested an end to the deal, after receiving a letter bomb at the Direct Line offices which injured a member of staff.^[7] Nevertheless, Wood remained richly rewarded, receiving another £17 million in 1995 and remaining a byword for the perceived excesses of corporate boardrooms in the 1990s, according to critics.^[10][11][12]

He left Direct Line in 1997 in a parting that was not entirely amicable,^[3] but continued to work with the Royal Bank in other areas, including Privilege, an insurance company specializing in higher-risk customers which had been created in 1996.^[13]

In 1999 Wood established Esure, this time in partnership with rival bank Halifax,^[14] who provided £150 million of startup capital.^[15] Esure used the same business model as Direct Line and targeted the same customer base, establishing a foothold in the market before following with a subsidiary (First Alternative) in 2003 for drivers of higher premium vehicles.^[16][17] Even their advertising and marketing were similar, to the point where Direct Line challenged Esure's "Mr Mouse" character to be an infringement of their own iconic red telephone on wheels, and they successfully took Wood's new venture to court to prevent it being trademarked.^[18][19] A women-only specialist insurance brand, Sheilas' Wheels, was established by Wood and Esure in October 2005.^[20]

He currently serves as the chairman of Esure, having purchased the 70% stake Lloyds Banking Group held in the company on 11 February 2010.^[21]

Wood also set up up two insurance companies in the United States, Response (1995) and Homesite (1997), although his involvement both of with them came to an end in 2004.^[3]

Footnotes