The Man from the Pru splits in two

INSURER Prudential is splitting in two – with the fast-growing Asian and US arm hived off from its slow and steady UK division.

The separation is expected to happen late next year after court approval, with investors getting shares in both companies.

Current chief executive Mike Wells will run the US and Asian operation – which had assets of £318bn and made profits of £4.2bn last year – and will be known as Prudential Plc.

Its US brand Jackson Life hopes to tap into the 3.5m Americans who are now over 65, and its businesses across the Pacific region see opportunities in the surging middle class market, with Asia’s working-age population due to surge by 200m in the next 12 years. The company also has a presence in five African countries and, overall, looks after nearly 19m customers.

The British and European segment includes life insurance brands and fund manager M&G and will be run by John Foley, who already oversees it. M&G Prudential, as it will be known, looks after £351bn of savers’ money and had a 2017 profit of £1.4bn, serving 7.2m customers.

Hargreaves Lansdown analyst Nicholas Hyett said: ‘The two businesses that emerge will be distinctive, a highgrowth emerging market play and a capital light dividend machine (eventually).’

Bosses have long faced questions over whether a division might make sense, but have insisted until now that they had no plans. But they claim to have been pleased with the progress of an internal restructuring which combined M&G with the European life business and decided to forge ahead. Wells said it was not currently possible to say what the relative sizes of the two parts will be. Both will continue to be listed on the London Stock Exchange and have their headquarters in the City. The chief executive said there were no plans to cut staff or slash costs. But he added: ‘One of the things that’s important about this business is that we do evolve staffing levels every year.’ The split is likely to fuel speculation that a large competitor may swoop on the British side of the business. Investment companies are going through a wave of deals as they seek to bulk up to cope with technological change and customers switching from expensive stockpickers to cheaper funds. It came as the Pru revealed overall profits of £2.4bn for 2017, up 24pc on a year earlier, and hiked its dividend by 8pc to 47p per share. Shares rose 5.1pc, or 92.5p, to 1918p.