British insurer Prudential announced its plans to spin off its UK and European business from its international operations - which include its Asian, US, and African operations - in March this year. The move was made after "a rigorous review" by the board, which concluded it is in the best interest of the group to operate as two separately listed firms and allow each other to focus on their individual strategies - a move aimed at better focusing on faster growing markets such as Asia and the US.
We spoke with Prudential Corporation Asia chief executive Nic Nicandrou on his plans to take the business forward after the landmark announcement to split up the 170-year old insurer.
In recent years, the Asian business has become the driving force within Prudential. While the UK business had once been the dominant part of the group – being the main source of funds to expand in Asia – the Asian unit is now undoubtedly Prudential’s crown jewel accounting for approximately 55% of the group’s revenue and 40% of its profits.
Prudential Corporation Asia’s regional life and asset management business stretches across 14 markets in Asia, and it occupies the top three position in nine out of its 12 life markets.
The demerger of Prudential’s international operations from its UK business will help the insurer’s Asian unit to accelerate its rate of growth further, he said.
One of the priority areas Mr Nicandrou outlined in the pursuit of growth is to further expand its distribution footprint. “It remains pretty much a race for distribution in this region which is so under-penetrated, so we are looking at ways to increase our footprint effectively.”
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Prudential Corporation Asia’s agency force stands at 650,000 across Asia, and it also sells through some 10,000 branches via various partnerships. Last year, its agency force grew by 9%.
As for growing its bank relationships, he said “A lot of banks are already tied up so what we are now doing is saying we’ll come in, not for 15 years, but maybe three or six years, and we’ll focus on your high-net worth and affluent customers and supply you our proposition. And we are getting a lot of traction doing that.”
“One advantage is that such structures are not exclusive so there is no upfront fee, which means we compete on our ability to engage the customer base of the bank as well as the strength of our offering and expertise.”
This is an excerpt of the full interview “Prudential to accelerate growth in Asia”. Asia Insurance Review subscribers can access the full interview here.
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