ANALYSIS: Will Equitable draw breath from PR? - One of 2001's most engaging corporate reputation challenges came in the form of troubled mutual insurer Equitable Life. Ed Shelton assesses the damage

If the Equitable Life rescue plan put before policyholders last

week is accepted, it will be something of a victory for the firm's PR

advisers. The deal, under which the HBOS bank will rescue the crippled

mutual, could signal the end of two years of trauma for Equitable and

its policyholders.

The society says the present 'compromise' deal represents the best

chance to remove the unlimited liability hanging over its head as a

result of past misjudgements relating to a guaranteed annuity rate


But for the deal to go through, policyholders will need to have been

convinced of the probity of the society's new management; the wisdom of

its approach, and, crucially, to accept further personal losses - up to

16 per cent of savings having already been written off.

As the deal goes to policyholders, much centres on the work that has

been done by the communications team - led by Burson-Marsteller, with

The Maitland Consultancy handling press and document drafting, and the

in-house operation led by PR head Alistair Dunbar providing back-up.

The Guardian personal finance correspondent Rupert Jones says: 'If they

can pull it off it will be viewed as a coup for the PR bods. There are

three votes, each with a minimum threshold - if they do not get all

three they are scuppered.'

William Clutterbuck, a Maitland partner, says the entire Equitable

crisis is about PR: 'We have hurdles to reach that are not so much

hurdles as "Beecher's Brook," and we have to get policyholders to

understand the importance of voting.'

If communications is crucial, the omens are not good. Earlier this year,

Equitable Member Action Group chairman Paul Braithwaite said the company

had provided 'a textbook study of how not to handle communications'.

He criticised the company for its failure to provide the 'rationale'

behind past decisions.

Damage to the company's reputation was compounded by news that two

former directors, Alan Nash and Chris Headdon - who stepped down as a

result of the crisis - will receive annual pensions of more than £90,000 each.

The mud stuck particularly firmly since MPs and journalists were among

those with pensions affected by the problems.

When the company's new CEO Charles Thomson and chairman Vanni Treves

appointed B-M in August, the brief was to re-habilitate the company

after this spate of bad press, with a view to shaping the environment

within which last week's offer to policyholders was made.

B-M deputy chairman and campaign director for Equitable Gavin Grant

says: 'Charles Thomson's concern was that the society had to launch a

complicated scheme into an atmosphere which was not promising. Our role

was to take charge of communications and provide an overall


Central to the strategy B-M oversaw was what Grant describes as the

biggest City-based public consultation ever undertaken. It involved the

new management touring the country in an election-style battle bus,

holding 18 local meetings.

Like a political party on the stump, the agency also organised polling

to track how opinion was shifting among policyholders. The polling

gauged the success of two key messages. First, that the new management

was untainted by what had gone before. And second, that there was only

'a single pot of money' available from the Halifax to compensate

different groups of policyholders with different situations, and that

the interests of each group had to be surrendered to the interests of

policyholders overall.

'If everyone was to argue for their own corner it would not work. There

was a single win-win strategy and only one way forward,' says Grant.

Jones is kind about the agencies' efforts on behalf of the society:

'They have done a good job in terms of getting the CEO in front of the

press, pushing the message and saying this is crunch time. And the

materials they have sent out, the voting packs and Q&A booklets, do at

least grapple with the key issues and tricky questions,' Jones says.

So far, Grant claims, evidence from the polling suggests that the PR

messages are getting through, with more than half of all policyholders

agreeing that the company's communications have improved since


But the policyholders will deliver the final verdict in their vote which

has a 7 January deadline. PR efforts will continue until then,

especially targeting The Daily Telegraph and The Times - the two key

papers in terms of reaching policyholders.

The signs do not look good. Even on the morning of the announcement of

the offer, Braithwaite was on Radio 4's Today programme picking holes in

the communications surrounding the offer, claiming that one of the

company's many press releases had got the number of policyholders


Jones says the biggest problem is apathy, not no-voters; if people do

not get round to responding, the offer will fail: 'Strong words have

been issued today. Quite rightly they are using language designed to get

people sitting up in their chairs. They know they are competing with a

lot of other distractions over the Christmas period.'

HBOS has already paid an initial £500m for the society with

another £250m to follow if the compromise is agreed by March next

year. If no such agreement is forthcoming, the prospects are bleak. If

it is, the PR teams will have earned their money - and a lot of people's


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