Standard Life’s base in Edinburgh will be shrouded with the gloom of defeat today as the insurer starts to pick up the pieces of its failed bid for Resolution and rues missed opportunities.

No one will be more disappointed than Sandy Crombie, Standard’s chief executive, who decided to seek a potentially transforming merger but whose strategy ultimately was found wanting. Mr Crombie will have to act swiftly to face down critics of the way he played the bid or he may find his own position vulnerable. With no shortage of potential successors internally, Mr Crombie is going to need plenty of support from his new chairman, Gerry Grimstone.

The Standard Life chief, this year celebrating a 41-year career with the insurer, was totally outwitted by Pearl, Hugh Osmond’s “zombie” fund of closed life funds. Pearl fought aggressively and won because of its nononsense, all-cash bid and a blocking stake in its target. By amassing a 24.1 per cent holding in Resolution, to become its largest shareholder, Pearl virtually guaranteed that a restructured bid by Standard Life would hit obstacles.

Even if Standard Life had won control with a restructured bid backed by just 50.1 per cent of shareholders, Pearl’s stake would have made it nigh-on impossible to put in place efficient tax and capital structures.

Critics may claim that Standard Life itself is now vulnerable in defeat. They may argue that the mud from some of Pearl’s attacks on its business model, not least its ability to fund new business, may have stuck.

That is always a risk, but the truth is that Standard Life did not need this deal. Its UK business has been firing on all cylinders and its effort to develop a model around self-invested personal pensions has yielded rewards. However, there have been questions over the next stage for the UK’s fifth-largest insurer. In a consolidating industry, those that are not predators swiftly become prey.

One thing is certain, though. We now know the ambition within Mr Crombie. With retirement looming as early as February 2009, the Standard chief will be expected to want to secure his place in history first.

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