PRUDENTIAL could be planning to branch out to Brazil as the British insurance firm, which has a strong presence in Asia and the US, taps into South America as part of its expansion plan.
Prudential chief executive Tidjane Thiam is said to have approached the Brazilian government in a bid to loosen the local legislation which prevents an insurance company from controlling its own sales force.
Currently, a step over to Brazil would require Prudential to partner with a bank and use the bank’s sales channel to sell insurance services and products, which could impinge on the insurer’s profits and corporate control.
But an imminent announcement of a Latin American expansion is not likely as the global insurer focuses its efforts on fighting against the threat of new European rules known as Solvency II.
Two weeks ago it emerged that Prudential is considering moving its London headquarters to Hong Kong to avoid the new controls, which could see Prudential lose out against American rivals if its US division is subject to the tighter European regulations on insurers.
But the company’s full year results announcement tomorrow is not expected to mention plans of a Brazilian branch – or an expansion in Cambodia, which is also thought to be underway.
The latter would be far less surprising, as the insurer already has a significant presence in Asia, including Vietnam where Prudential is the top insurance provider. The company is actively looking to grow in this area.