The plan from the Pru

14 March 2018 By Christopher Thompson Follow @CGAThompson

The global insurer is to demerge its European operations into a separate UK-listed arm. That could help unwind a discount to the probable sum of its parts but carries costs as well. Pru investors might have been better served by a sale, or an unpicking of the U.S. and Asian arms too.

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Britain's Prudential said on March 14 that it would demerge and separately list its UK and Europe retirement and asset management division from its international insurance business.

The insurance company, which operates mainly in Asia, the US and the UK, said it planned to list M&G Prudential on the London Stock Exchange. It also announced the sale of a 12 billion pound UK annuities book to Rothesay Life.

"The decision to demerge M&G Prudential follows a rigorous review by the Board which considered all options, including the status quo, and concluded that it is in the best interest of the Group to operate as two separately-listed companies, able to focus on their distinct strategic priorities in their chosen geographies," Paul Manduca, Chairman of Prudential, said in the statement.

The insurer also announced a 41 percent year-on-year rise in annual pre-tax profit for 2017 to 3.29 billion pounds at constant currency rates, thanks to strong earnings growth in Asia. Excluding non-operating items, pre-tax profit grew by 6 percent 4.69 billion pounds at constant currencies.

The company’s Solvency II ratio stood at 202 percent of the minimum required capital buffer, equivalent to 13.3 billion pounds.

The board announced an 8 per cent year-on-year rise in the annual dividend to 47 pence per share.

As of 0923 GMT, Pru shares were trading at 1919 pence, up 5 percent.

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