It’s been a long ride in the insurance business for Peter Wood, but the serial entrepreneur looks to be edging towards the exit door after Esure Group PLC LON:ESUR) agreed to be taken over by Bain Capital for £1.2bn.
If, as the City expects, shareholders back the deal, Wood stands to net a handsome £310mln windfall, thanks to the 30.7% stake he still holds in the company which he founded in 2000 as part of a joint venture with Halifax.
READ: esure agrees £1.2bn takeover
It’s not the first time esure has topped up his coffers, either. After leading a management buy-out a decade after its formation, Wood took the insurer public in 2013, earning himself £200mln following the sale of a third of his stake.
The 72-year-old has also seen a sharp rise in the value of his 25.6% stake in Gocompare.com PLC (LON:GOCO), which was demerged from esure almost two years ago.
Since it was spun out and listed on the London Stock Exchange, shares in the price comparison site have advanced more than 60%, meaning Wood’s stake is now worth around £125mln.
There’s even a chance of a fourth trousering, too, with Wood planning to take a small stake in the new esure business, where he will also take up the role of chairman.
If venture capital group Bain decides to cash in at some point down the line, Wood would no doubt hope to see a decent return on his £50mln investment.
That could be his retirement gift to himself, with the Evening Standard reporting that he is winding down and has no plans to launch any new businesses.
Also founded Direct Line
esure hasn’t been the magnate’s only cash cow in the insurance industry; he accrued a large chunk of his wealth as a result of Direct Line Insurance Group PLC (LON:DLG).
This was the forerunner to esure, the first telephone-only insurance company in the UK which Wood launched alongside Martin Long in 1985 with the financial backing of the Royal Bank of Scotland.
He never had a stake in the business but as its chief executive, he enjoyed some huge pay packages worth tens of millions during the 1990s, making him the highest paid director in the UK at the time.
While he may have been the poster boy for City excesses back then, he’s not the only one to have made a fortune from insurance.
Admiral boss richly rewarded
US-born businessman Henry Engelhardt is probably the most well-known UK insurance magnate other than Wood.
He was the sales and marketing manager at Churchill Insurance - founded by Martin Long - before co-founding Admiral Group PLC (LON:ADM) in 1991 with David Stevens before its launch two years later.
He led a management buy-out of Admiral just before the turn of the millennium and has guided the insurer to being one of the most valuable companies in Britain – valued at £6bn – thanks to a run of record-breaking years since it listed in 2004.
Engelhardt stepped down as the group’s chief executive in 2016 but still holds a 12% stake in the company worth around £700mln.
Of course he also collected a decent wage - £400,000 in his final full year – during his time at the helm and took home millions of pounds in dividends.
And Admiral’s employees also joined in the largesse this year, with the group revealing with its full-year results at the end of February that over 9,600 staff would each receive free shares worth a total of £3,600 under the employee share scheme based on the 2017 numbers.
In fact, some long-serving staff have received upwards of £30,000 in share awards during their time at the insurer.
Hastings directors cash in
Another American to make a few quid in the UK insurance game was David Gundlach, who co-founded Hastings Group Holding PLC (LON:HSTG) in 1996 after working at Lloyd’s of London.
He and his partner Andrew Bowen sold it ten years later to Insurance Australia Group for a reported £140mln, with Gundlach going on to set up a film production company in Los Angeles.
Hastings wasn’t just a golden goose for those two, a handful of its oldest investors have been cashing in their shares, too.
Former chairman Neil Utley, who led a management buyout of the firm in 2011, and fellow ex-directors Keith Chorlton and Richard Brewster were among those who sold £100mln of Hastings shares towards the end of 2016.
Utley still holds just under 5% of the company’s stock, worth around £85mln.