Pru funds merger sparks split rumour

TWO giant UK businesses run by insurer Prudential are being merged – sparking questions over whether the firm is planning to break itself up.

The Pru is combining its British life insurance and M&G Investments divisions, creating a behemoth with almost 7,300 staff.

Bosses say they want to adapt rapidly to the latest technology, and attract savers whose cash is languishing in low-interest accounts.

The changes are likely to add fresh fuel to the debate about whether Pru should split itself up. Critics say it makes sense to hive off the established and relatively stagnant UK operations from fast-growing divisions in the US and Asia.

British life insurance profits were £480m in the first half of 2017, up just 1pc on the same period in 2016. By contrast, Asian profits were up 30pc at £870m.

Chief executive Mike Wells said that Asia in particular had huge potential for future growth.

When merged, the divisions will manage £332bn of assets for more than 6m customers.