Lumsden, Iain 1946–

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Iain Lumsden
1946–

Former chief executive officer, Standard Life Assurance Company

Nationality: British.

Born: June 6, 1946, in Kirkcaldy, Scotland.

Education: Oxford University, BA, 1967.

Family: Son of John Alexander Lumsden (insurance broker) and Helen (maiden name unknown); married Rosemary Hoey, 1970; children: two.

Career: Standard Life Assurance Company, 1967–2004, began as assistant actuary, became actuarial general manager (1984), group finance director (1990); 2002–2004, CEO.

Awards: Chief Executive of the Year, Financial Advisor, 2003.

■ Iain Lumsden joined the British insurance provider Standard Life Assurance Company as an assistant actuary in 1967 and over the course of 35 years worked his way to the company's top rank of chief executive. Known for his calm and open management style, Lumsden urged policyholders to remain composed during the downturn in the market in the early 2000s. Throughout his 22-month tenure he believed that the best course of action for Standard Life was to maintain its mutual status and avoid changing over from a policyholder company into a stock company. When Standard Life announced that it was ready to abandon its mutual status in early 2004 after a period of heavy losses, Lumsden retired two years ahead of schedule.

RISE TO INFLUENCE AT STANDARD LIFE

Lumsden grew up in Liverpool and, as he told London's Times, aspired to be "the world's greatest mathematician" (September 27, 2002). After earning a mathematics degree from Oxford University, however, he instead chose to pursue a job as an assistant actuary at Standard Life Assurance Company, the largest mutual-insurance company in Britain, where his father had worked briefly following World War II.

Lumsden steadily ascended through the ranks at Standard Life, earning appointments to the positions of chief actuary (or actuarial general manager) and finance director. During this period Lumsden also pursued his professional interest in the Institute of Financial Accountants—or as it was known in Scotland, the Faculty of Actuaries—becoming a fellow in 1971, sitting on the institute's examination board from 1978 to 1986, and serving as the chairperson of the U.K. actuarial profession's Life Assurance Joint Committee from 1987 to 1991. As he took on positions of increasing responsibility at Standard Life, Lumsden became known as a calm and level-headed leader and an open communicator who later led an initiative by the Association of British Insurers to encourage forprofit insurance companies to be more transparent with regard to their business practices. Seen as part of an insider group of actuaries who ran Standard Life, Lumsden was appointed to the key role of group finance director in 1990.

TENURE AS CHIEF EXECUTIVE

When Scott Bell retired as the managing director of Standard Life in 2001, Lumsden was appointed chief executive. There was some speculation that he would be less committed than his predecessor to the mutual status that Standard Life had held since 1925—especially since there was pressure on the company to demutualize, which would result in large windfall payments to policyholders. Lumsden retained his predecessor's policy of mutuality as a practical strategy, however, saying that while he had no religious commitment to the company's mutual status, it was the best business decision for remaining competitive, minimizing taxation, and providing consistent returns to policyholders. Maintaining his commitment to mutuality throughout the downturn in the market that began in 2001, Lumsden urged policyholders not to overreact—although he was criticized for overinvesting in equities while Standard Life was losing billions of dollars in shares. In January 2004, after two years of heavy losses, Standard Life announced that it was reconsidering its mutual status.

Amidst the controversy surrounding the public statement, Lumsden announced that he would retire two years ahead of schedule, saying that he would not be able to see the review of the company's status through because of his planned retirement date. Sandy Crombie, Lumsden's deputy chief executive, assumed the post, and Lumsden left the company immediately. He was later criticized in the British media and by policy-holders at Standard Life's annual general meeting for receiving sizeable performance-bonus and pension awards based on his brief 22-month stint as chief executive.

LEADERSHIP STYLE

Reflecting on his career in an interview conducted in May 2004, Lumsden characterized his management style as "consensual, logical, well researched, and fact based." As the reporter Andrew Cave commented in his Daily Telegraph profile of Lumsden, "'Balanced' sums up Lumsden. He is painstakingly rational and patient" (June 29, 2002). Lumsden remained committed to rationality in leadership style and openness in communication throughout his career, although his reputation among policyholders and in the press suffered nonetheless during the final period of his tenure as chief executive.

Lumsden held a number of other important insurance-industry roles, such as the chairperson of the Finance, Regulation, and Taxation Committee for the Association of British Insurers. An avid golfer, Lumsden's also enjoyed traveling and spending time with his family. At the beginning of his retirement period Lumsden had begun some charitable work and also became the chairman of the board of trustees of the Scottish Enterprise Pension and Life Assurance Scheme, a government organization encouraging small businesses.

See also entry on Standard Life Assurance Company in International Directory of Company Histories.