INSURANCE giant Prudential has said its future lies in Asia, underlining fears that the firm will relocate from London to Hong Kong if tough new rules for insurers based in Europe are implemented.
Speaking to reporters as he announced a seven per cent increase in worldwide operating profit to £2.07bn, chief executive Tidjane Thiam added that he saw little growth potential in the British business.
He also reiterated that the hefty capital requirements in Solvency II, the EU’s tough new rulebook for insurers, would destroy its American business.
“I can tell you, fighting US competitors who don’t have to worry about Solvency II, we just won’t have a market, we won’t be able to sell any products at all,” he said.
Prudential could avoid the rules if it moved its base outside the EU. Since 2008 the firm’s Asian profits have tripled from £257m to £709m, making Hong Kong a likely destination.
News that the firm was considering leaving the City prompted Mayor Boris Johnson to launch a campaign to keep its headquarters in London – as first revealed by City A.M.
Since then, David Cameron has also pledged to fight against Solvency II, which will be introduced from 2013 onwards.
Shares in the firm closed up 1.8 per cent at 763p.