Prudential open to eastwards move

By GARETH MACKIE
Published on 10/08/2012 21:47

PRUDENTIAL said on Friday that it was keeping its options open regarding a possible relocation of its head office after it reported a 13 per cent rise in first-half profits.

Britain’s biggest insurer warned earlier this year that it might leave Europe because new rules on how much cash it must hold in reserve would make its US business less competitive.

The regime, known as Solvency II, is expected to come into force in 2014, and chief executive Tidjane Thiam said the group was considering what action to take “in the event that the final outcome is negative in terms of our ability to

deliver value to our customers and shareholders”.

A move to Hong Kong has long been rumoured given the firm’s growing focus on Asia, where profits at its life insurance business soared 26 per cent to £409 million. That helped group profits rise to £1.16 billion, up from £1bn a year earlier

and slightly ahead of expectations.

Investec analyst Kevin Ryan said Asia was the group’s “star feature” and the outlook

remained good, as economies across the region were stronger than those in the UK and US.

New business sales in the UK were largely flat at £412m, with a drop in corporate pension sales offsetting a rise in annuities. The interim dividend was up 5.7 per cent at 8.4p per share.

Thiam said: “Those opportunities are most evident in south-east Asia, where the depth and breadth of Prudential’s franchise is a source of strength.”