Prudential to split £10bn UK annuities book into four saleable chunks

Jasper Jolly
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The logo of the Prudential insurance gro
Some investors are pushing for Prudential to leave behind its UK operations (Source: Getty)

British insurance giant Prudential has started contacting potential buyers of large chunks of its pension annuities business as part of its plans to review its exposures to the UK market, according to reports.

Four parcels valued between £2bn and £3bn could be sold, Sky News reported today.

Prudential’s plan to divest a £10bn in annuities first emerged in August, with analysts speculating that the group might split its operations to take advantage of the higher-growth Asian market.

Read more: L&G ready to swoop on £10bn Prudential back-book

However, the size of the annuities book was seen as an obstacle to a deal. Prudential is considering splitting the book into different asset profiles to appeal to buyers, Sky News said.

Growth in the UK business has slowed, and the firm has stopped selling annuities completely. However, a divestment of UK operations could allow the firm to focus on the burgeoning demand for financial instruments from the Asian middle class, potentially boosting its share price.

Legal and General has been previously mooted as a possible buyer for parts of the book. Last year it spent £3bn on Aegon's annuity business. Other contenders could include Rothesay and Phoenix.

In August Prudential announced it was merging its UK and Europe asset management and insurance arms as it tries to “leverage our considerable scale”, according to chief executive Mike Wells.

Read more: M&G Prudential is born: Insurer announces European shake-up

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