Profits soar as Tucker leaves Pru in great shape

The company made profits of £2.9 billion in 2008, a jump of 17%. It has lately fared much better than arch-rival Aviva, which has faced serious questions about its financial strength.

The numbers today allow Tucker to claim he is leaving Prudential as the strongest player in a sector that has been under intense scrutiny.

Regulators and investors have been fearful a big player could go under in the next stage of the financial crisis.

Tucker is to be replaced by finance director Tidjane Thiam, who was poached from Aviva two years ago and had long been regarded as a likely successor.

Tucker said: "I think the results are very strong and the company is in good shape. I have done what I set out to do," adding that leaving the Pru after 25 years "has been one of the hardest decisions of my life".

He has six months left at the insurer to plot his next move and is keen on getting another big job.

Prudential shares are down from a 12-month high of 726p, a fall that shows how much concern there is about life companies. Today they rallied 22¼p to 274p as investors took heart from the confidence expressed in the results.

A full dividend of 18.9p a share will be paid, a rise of 5%.

Other insurers have been forced to cut their payouts to investors in a bid to shore up balance sheets. There is rising talk that Legal & General may have to ditch its dividend altogether.

Prudential has a surplus of £2.5 billion -- enough cash to survive a slump as bad as the Great Depression, it reckons.

The insurer seems to have abandoned plans to buy up the Asian assets of collapsed US insurer AIG, though it made no comment on this today.

The assumption that it has ditched this deal will reassure investors, some of whom were concerned that the Pru would overpay for assets of questionable value.

Its own Asian business is doing well. Prudential's profit in Asia grew 15% to £741 million.

Pru chairman Harvey McGrath said of Tucker: "Mark has made an outstanding contribution and has led the transformation of Prudential into the strongest and best focused company in the sector. We are truly sorry to see him go but fully respect his decision."

Today's market reaction to the Pru's results is in complete contrast with how it greeted those from Aviva two weeks ago. Shares in the insurer behind Norwich Union slumped by a remarkable 30% in one trading session as fears grew that it is not being sufficiently prudent.

The company embraced controversial new accounting methods which required it to report a loss.

Prudential was keen to stress today the difference between insurers and banks. "Insurers do not borrow short and lend long, do not give out credit, are structurally long in terms of liquidity and are much better able to hold assets to maturity without risk of forced selling at depressed prices," it declared.

Short sellers betting that insurance shares will keep falling have been squeezed in the last few days as the sector showed signs of recovery.