Prudential sees profit boost from Asia

 Prudential, Britain’s largest insurer, said new business profit from its life insurance operations rose 17 percent in the first nine months of the year, driven by another robust performance in Asia.

After a tough year for many asset managers, however, Prudential said its two fund management units, M&G Investments and Asia-focused Eastspring, had both posted net outflows of external client money.

“A key positive in Prudential’s trading update is a move up in Asian volume growth,” said KBW analyst Greig Paterson in a note to clients, flagging an ‘outperform’ rating and 2,100 pence price target, although he called the outflows “disappointing”.

At 0909 GMT, shares in Prudential were down 0.5 percent, in a 1 percent weaker FTSE 100.

The life insurer, which has a market value of around 42 billion pounds ($54.60 billion), is in the process of demerging that will see the UK and European insurance and asset management units of the 170-year-old company split off into a separate company.

Once the new company, M&G Prudential, lists in London, the remaining international operations will refocus on faster-growing markets in Asia – particularly China – as well as the less tightly regulated US market.

The planned demerger is on track, Prudential said in the business performance update ahead of an investor day event in Singapore.

The company said new business profit in Asia, where a burgeoning middle class has boosted demand for insurance, rose 15 percent to 1.76 billion pounds.

“As we look ahead post-demerger, the profitable growth prospects of our Asia businesses remain substantial, given the increasing protection and savings needs of our customers and the extent of the footprint we have established,” Group Chief Executive Mike Wells said.

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