Prudential’s New CEO Signals Plans to Build on Asia StrategySarah Jones
Prudential Plc’s incoming Chief Executive Officer Mike Wells signaled that he will pursue his predecessor’s strategy of driving growth from Asia when he takes over at the U.K.’s largest insurer next month.
Asia was the only region where Prudential increased new business profit in the first three months of 2015, climbing 22 percent to 309 million pounds ($473 million) on a constant currency basis. Low interest rates hurt operations in the U.S. and the U.K., where earnings fell 28 percent and 11 percent respectively.
“I have been here 19 years and have been fairly involved in most of strategic work so I feel some pride of authorship along with the folks around the table on where we are,” said Wells, currently CEO of the Jackson Life unit in the U.S. “You will see our currently strategy plus,” declining to elaborate.
Wells, 55, takes over from Tidjane Thiam, who takes the top job at Credit Suisse Group AG. In contrast to Ivory Coast-born Thiam, who has run the British insurer since 2009, Wells has spent most of his career in America and helped Jackson Life to become the largest seller of variable annuities in the U.S.
Asked whether he had plans to introduce similar variable annuity products into the U.K. to recapture lost revenue from government changes to individual annuities, Wells said the group was “always looking at capabilities,” but said there was nothing yet to announce.
New business profit in the U.K. fell to 34 million pounds in the quarter as sales from individual annuities declined and the company wrote no bulk annuity deals.
At Jackson Life, where Wells has been CEO since 2010, new business profit dropped 28 percent to 153 million pounds after variable annuities sales declined 18 percent. Assets increased 16 percent to 89.2 billion pounds.
Commenting on Prudential’s result for the last time as CEO, Thiam said the insurer “prioritized value over volume” in the “mature” U.S. and U.K. markets.
“Our strategy is simply to pursue growth in growing markets,” Thiam, 52, said on the conference call with journalists. “In the U.K. and the U.S. we don’t target growth, it depends on the environment.”
Prudential operates throughout Asia including Hong Kong, China, Singapore, Indonesia, Malaysia and Vietnam. Sales in the region have grown for 22 consecutive quarters, the company said today.
In asset management, U.K.-based M&G reported an 8 percent increase in external funds under management to 139.5 billion pounds while in Asia, the Eastspring unit saw new third-party inflows more than double to 2.3 billion pounds.
The shares fell 0.8 percent to 1,599.5 pence at 2:56 p.m. in London, trimming the insurer’s gain this year to 7.2 percent.
Prudential Plc has no relation to Newark, New Jersey-based Prudential Financial Inc.
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