Prudential’s Asia focus pays off

LONDON: Prudential Plc’s focus on Asia is paying off.

The largest UK-listed insurer reported that first half profit from its Asian operations soared 14% to £1.02bil on a constant exchange rate basis, ahead of a spinoff that would separate its UK operations from faster-growing markets elsewhere.

By splitting into two business, Prudential is seeking to take greater advantage of potential growth in Asia, which generates about a third of its earnings and where new demand for insurance is strongest.

The insurer hopes it can roll out retirement solutions it developed in the US to Asia as the population there ages. The firm said the demerger of M&G Prudential, its UK asset management and retirement unit, is on track. “We have made a good start to 2018, delivering high-quality, profitable growth,” Mike Wells, chief executive officer, said in the statement.

Wells said in a Bloomberg TV interview on Wednesday that he is bullish on Asia and sees the opportunity to grow the asset-management business in the region. The firm posted a double-digit increase in new business profit in Asia and rising average assets at Asian asset manager Eastspring.

Prudential shares rose as much as 2.3% in London, before paring gains to 0.1% as of 10:36 am. The demerger is unlikely to happen before Prudential completes its sale of £12bil of annuities to Rothesay Life.

After that process is completed, both Prudential and M&G Prudential are likely to be included in the benchmark FTSE 100 Index of the UK’s biggest companies.—