Prudential Plc Plans to Double Asian Profit by 2013 After Failed AIA Offer

Prudential Plc plans to double profit in Asia within the next three years as the U.K.’s biggest insurer outlined a growth strategy following its failed bid for AIA Group Ltd.

Prudential wants to raise pretax operating profit in Asia to about 930 million pounds ($1.6 billion) by 2013 from 465 million pounds in 2009, the London-based insurer said today in a statement. Chief Executive Officer Tidjane Thiam will announce the plan at an investor conference in London today.

“We view these as challenging especially given the current economic climate,” Eamonn Flanagan, a Liverpool, England-based analyst from Shore Capital Group Ltd. wrote in a note to clients today. “The question remains unanswered as to what the group aims to do with all this cash.”

Thiam is redoubling his efforts to squeeze profit and growth from the company’s existing Asian division after an investor rebellion caused him to drop his bid to buy American International Group Inc.’s Asian unit for $35.5 billion earlier this year. The purchase would have more than doubled the size of the insurer and been its biggest acquisition on record.

Prudential rose 23.5 pence, or 4.1 percent, to 591.5 pence at 8:46 a.m. in London trading, valuing the firm at about 15.1 billion pounds.

Generating Cash

The insurer also plans to double profit from new business in Asia to about 1.4 billion pounds by 2013 from the 713 million pounds it made in 2009. The region will aim to generate 300 million pounds in cash by 2013 compared with 40 million pounds in 2009, Prudential said. Insurers typically use cash to pay dividends and invest in new business.

“The objectives for Asia reflect our belief that Asia will continue to offer the highest growth and highest return opportunities for a generation or more,” Thiam said in the statement. “Market conditions in Asia continue to be positive, with Asian economies performing strongly in spite of a challenging global environment.”

The investor day will reveal no new information on current trading, Prudential said.

Prudential Plc is a separate company from and has had no historical relation to Newark, New Jersey-based Prudential Financial Inc.

To contact the reporter on this story: Kevin Crowley in London at kcrowley1@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net;

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