Pru may have lost out on Asian bid but region remains key

Prudential highlighted the importance of its Asian markets yesterday after robust sales in the region drove a 17 per cent rise in third-quarter revenues.

The firm - Britain's biggest insurer by market value - said the fast-growing economies of south-east Asia represented its primary focus for growth and investment as penetration rates for insurance products remained low in comparison with developed countries.

In support of this strategy it said it had a strong position in the US and a more focused business in the UK, where the Pru has concentrated on driving profits through value rather than volume growth.

By competing selectively in the retirement savings and income markets, the Pru said sales in the UK - now the smallest slice of its business - rose 5 per cent to 166 million in Q3.

In Asia, where economic conditions are "very positive", sales lifted 25 per cent to 353m, despite the impact of regulatory changes in India.

Overall sales in the July-to-September period were 809m on an annual premium equivalent basis - a measure used by most big insurers. The figure was ahead of a market consensus forecast of 773m.

Analysts said the group had taken another step in its rehabilitation after an abortive bid to land the Asian arm of US giant AIG cost it 377m and incurred the wrath of shareholders.

Chief executive Tidjane Thiam faced calls to quit following the debacle earlier this year, when the Pru's major investors baulked at the $35.5 billion (22.6bn) asking price and AIG refused to budge.

Charles Stanley analyst Nic Clarke said: "We believe that this set of new business results, being better than expected, helps to re-build investor confidence in the Pru's management so badly damaged during the failed approach for AIA."