Prudential More Likely to Leave U.K. After FSA Email, Oriel Says

Prudential Plc (PRU) may be more likely to quit London after showing its frustration with the Financial Services Authority in an e-mail leaked to a British newspaper, according to Oriel Securities Ltd.

Barry O’Dwyer, the insurer’s U.K. deputy chief executive officer, said regulation in its home market was often driven by “the personal prejudices of key individuals,” in an e-mail to staff published in the Sunday Telegraph yesterday. Some of the FSA’s planned rules for insurers are “ludicrous,” he wrote.

Prudential, which gets 75 percent of its revenue from Asia and the U.S., threatened to relocate its domicile outside the U.K. this year, saying the European Union’s solvency rules may hurt its international businesses. Chief Executive Officer Tidjane Thiam gained support from Prime Minister David Cameron and Mayor Boris Johnson, who said they would lobby regulators to change the rules.

“This does highlight the challenges that Prudential feels it faces from being regulated, or over-regulated, by the FSA,” Marcus Barnard, a London-based analyst at Oriel with a buy rating on the stock, wrote in a note to clients today. “These comments would seem to suggest high-level dissatisfaction with the U.K. and suggest this move is more likely.”

O’Dwyer sent the “light-hearted” message as part of his weekly correspondence with employees, Prudential, Britain’s biggest insurer by market value, said in an e-mailed statement.

“Clearly, in this case his attempt to inject humor into his communication was misjudged,” Prudential said. “We work constructively and positively with government ministers and regulators on a wide range of issues to safeguard the interests of our seven million U.K. customers.”

Joseph Eyre, a spokesman for the FSA, declined to comment.

To contact the reporter on this story: Kevin Crowley in London at

To contact the editor responsible for this story: Edward Evans at

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