Prudential Plc (PRU) Chief Executive Officer Tidjane Thiam said the U.S. business has a “great future” in the company, damping speculation he may follow European competitors in selling the North American unit.
Jackson National Life, the insurer’s U.S. division, increased new business profit 11 percent to 756 million pounds ($1.2 billion) in the nine months to Sept. 30, boosted by sales of Elite Access, a variable annuity product, the London-based company said in a statement today. Revenue in the U.S., which contributes about a third to the group, rose 6 percent to 1.2 billion pounds.
“It’s a great business. We like Jackson very much, and it’s been very good for the group to own it,” Thiam said on a conference call with reporters. “When the times are good everyone comes to you and says, ‘Break it up, there is not much sense, sell this, sell that.’ When times are bad, diversification is great.”
Jackson National has benefited as competitors such as MetLife Inc. (MET) and Prudential Financial Inc. scaled back variable annuity sales to limit risks tied to volatility in stock and bond markets. In Europe, Aviva Plc (AV/) and ING Groep NV (INGA) have retreated from the North American market.
Aviva sold its U.S. unit to Apollo Global Management LLC last month for $2.6 billion as it rebuilds reserves. ING sold a $1.1 billion stake in its U.S. insurance unit to reduce its holdings to 57 percent in agreement with European regulators. Elsewhere, Canada’s Sun Life Financial Inc. divested its U.S. annuity business to a firm tied to Guggenheim Partners LLC. last year.
Thiam, 51, said in August when Jackson National reported a 32 percent increase in six-month operating profit that he remained “open minded” to the future of the U.S. division including a potential sale.
“We are very happy with the U.S. business, it’s had a phenomenal performance and is an amazing success story,” said Thiam said today. “It’s a very disciplined business that has done very well. It has a great future in the group.”
Jackson National, which has been controlled by its U.K. parents since 1986, was the top variable annuity seller in the first half of this year. It trailed only Prudential Financial last year, and lagged behind both that firm and MetLife in 2011
Prudential, the U.K.’s biggest insurer by market value, reported 12 percent growth in new business profit for the group, boosted by an increase in sales of at least 10 percent in six South-East Asian markets.
The company is scheduled to hold a presentation for analysts and investors on Dec. 10.
Prudential Plc has no relation to Newark, New Jersey-based Prudential Financial Inc. (PRU)
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