PRUDENTIAL will curb its ambitions in India and China to concentrate on emerging Asian markets.
Chief executive Tidjane Thiam said the firm was limited in those countries by rules on foreign ownership of financial institutions.
Instead it will focus investment in Malaysia, Indonesia and Vietnam. Thiam says investment in these economies increased the firm’s profits by 25 per cent between 2008-09.
New investment has been largely funded by pulling capital out of UK operations. The amount of capital the company holds in the UK has fallen from 40 per cent in 2008 to just 14 per cent. Profit
from future UK activity will be invested in overseas expansion.
The plans are part of a wider shake-up of Prudential’s Asian business model that has seen Britain’s biggest insurer pull out of several mature Asian markets.
Thiam has already off-loaded operations in Taiwan and Japan, and Prudential’s South Korean venture is under review.
Thiam revealed he had vetoed a plan to hand millions of pounds back to policy holders in the lead-up to the financial meltdown and that he pulled the plug on two high profile acquisitions. He told the Sunday Times the firm was heavily exposed to losses incurred by institutions such as HBOS but that by exercising caution early on, the company was saved from the worst of the crisis.
Analysts at Goldman Sachs have forecast the insurer will reverse the loss of £406m posted in 2008 with profits in the region of £1.1bn for 2009.
Earlier this month Prudential purchased the life insurance unit of Singapore’s third-biggest lender UOB for £189m.