Prudential to exit US and focus on Asia, Africa

LONDON: British life insurer Prudential planned to spin off its US business Jackson to focus on Africa and its largest market Asia, responding to investor pressure for a split.

Prudential’s shares hit eight-week highs as investors cheered news the company would follow in the footsteps of peers Standard Life and Old Mutual, which have both divided up their operations in recent years.

“This new Prudential model will be a growthoriented business,” Prudential CEO Mike Wells, a former boss of Jackson, told a media call. “Jackson is ready to be a standalone.”

US hedge fund Third Point took a 5% stake in Prudential in February and called on management to split the company in two.

A minority initial public offering of Jackson is planned for the first half of 2021, with “full divestment over time”, Prudential, which spun off its European unit M&G last year, said.

It had already sold an equity stake in the US unit to Apollo Global-backed Athene Holding for $500 million in June.

Athene now owns 11% of Jackson and has reinsured $28 billion of its annuity porfolio. Wells said the investor was a “potential partner” for Jackson for further reinsurance transactions.

Prudential, which started life in London in 1848, will maintain its head office in the city, of which Third Point had been critical, but said it would cut costs. Wells did not say if there would be job losses. Prudential’s shares rose more than 4% before easing to 12.71 pounds per share, up 3.2%.