Pru faces renewed pressure on break-up

by Gill Montia

Story link: Pru faces renewed pressure on break-up

Speculation that Prudential will be broken-up is mounting, ahead of publication of the group’s full-year results next month.

The insurer’s Asian and US businesses have both been experiencing strong growth, whereas its UK division is seen as underperforming with sales growth in the domestic market falling behind that of Legal & General and Aviva.

This is due in part to the fact that the company reduced its sales force some years ago and has failed to secure distribution agreements with banks.

It is rumoured that Paternoster, the pension buy-out firm could be interested in acquiring part of Prudential’s UK business. Paternoster is now headed by Mark Wood, the former chief of the Pru’s UK division.

Toscafund Asset Management, the London-based hedge fund that controls about 1.1% of the insurer, is another possible contender, as is Ping An, the Chinese insurer that has recently increased its stake in Fortis.

Last month shares in Prudential rose sharply on reports that Ping An was close to taking a $13.8 billion stake in the group.

Ping An’s current chief operations officer was formerly the head of Prudential Group in Greater China, helping the company become the second-largest Western insurer in the country after AIG.