Business Profile: Lowry Maclean
John Cranage speaks to the Wesleyan's non executive chairman Lowry Maclean.
Lowry Maclean, an avuncular and humorous man, points to two black and white framed photographs on the wall of his office on the seventh floor of the Wesleyan offices in central Birmingham.
One is of Albert Einstein the other is a vintage photgraph from Cowes of a yacht pressing ahead under full sail.
The Einstein picture is significant because Lowry admires the great physicist’s ability to reduce complexity to (reasonably) simple one line formulae.
The yacht symbolises for Lowry the Wesleyan’s 169-year history of making headway through financial seas full of all kinds of dangers.
Now aged 70, he will retire in May after 23 years with the country’s leading mutually-owned life office, including seven years as chief executive and the last ten as non-executive chairman.
He will hand over to his successor Bryan Jackson, the former top Toyota Europe executive, at the Wesleyan’s annual meeting on May 7 with a business that sailed through the credit crunch and recession in good shape.
Wesleyan customers in the medical, dentistry, legal and teaching professions will again be benefiting from with-profits returns superior to those achieved by much bigger rivals such as Aviva and Standard Life.
Figures for 2009 are expected to show a rise in operational income from £62 million in 2008 to about £73 million, a rise of about 18 per cent – this in some of the most volatile markets in living memory – and up from £43 million in 2005. The figures reflect a 40 per cent rise in general insurance income this year.
“We have a plan to lift operational income to £101 million in 2012,” Lowry said. Assets under management are expected to have risen to about £4 billion by the year end, helped by the fact that the society is able to play a long investment game without worrying about stock market peaks and troughs.
“Our payouts will be strong again this year.”
The Wesleyan has also been rated ten out of ten for financial strength in the Cazelet Consulting with-profits funds league table for the fifth year running.
It is due, Lowry says, to the Wesleyan’s unique business model which has seen it focus on niche professional sectors such as teaching, medicine and the law.
“When we put it in place we had a lot of ideas about it, but we never quite imagined how useful it would be in a major economic downturn.
“Because doctors, dentists, teachers and to a lesser extent, lawyers, remain employed during tough times.
“It has turned out to be a very resilient business model.”
Lowry Maclean was born in Halifax, the son of a Highlander who became president of the once-mighty Halifax Building Society (“he’d turn in his grave if he knew what has happened”). He read economics at Cambridge, joined Hambro’s, the merchant bank, in London, and went to work in the US for Field Crest, the household linen company.
While there he helped develop non-iron bedsheets and fitted sheets. He also met Anne, his wife of 44 years.
He returned to the UK in 1979 where he worked initially for Field Crest before being head hunted to become managing director of Tomkinson’s, the Kidderminster carpet manufacturer.
In ten years he raised the share price from 17p to £10 and profits from £90,000 to £5 million.
Recruited to the Wesleyan initially as a non-executive director, Lowry went on to serve as chief executive from 1992 to 1999, when he took over as chairman.
Tragedy struck the Wesleyan in 1999 when newly-appointed chief executive Mike Sinclair died at the age of 45.
Lowry served as a steadying influence as succession of chief execs came and went before the present incumbent, Craig Errington, was promoted to the post in 2005.
The years since the post-2000 stock market slump have seen the Wesleyan outperform its much bigger rivals, thanks largely to the fact that its Birmingham investment experts did not get sucked into the dot.com/media/technology shares boom that ended up as flat as the Millennium champagne.
Because it did not have to sell shares at the bottom of the market and so crystalise the sorth of heavy losses that did for Standard Life, the Wesleyan’s with-profits fund has been able to maintain a heavy equity loading through subsequent market troughs.
“We preferred dot.assets to dot.coms; companies with real assets, real management and a track record,” Lowry said.
It exemplifies the cautious approach of its sober but business-friendly founding fathers.
