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Prudential to demerge UK & Europe arm and sell £12bn UK annuity portfolio

Prudential to demerge UK & Europe arm and sell £12bn UK annuity portfolio

Rothesay Life is one of Britain's leading life insurers specialising in providing de-risking solutions to UK-defined benefit pension schemes and insurance companies.

Prudential said the timing of the demerger would depend on several factors, including the completion of the United Kingdom annuity sale, and the prevailing market conditions.

It will also help the United Kingdom part of the business "continue its transformation into a more capital-efficient and customer-focused business, targeting growing demand for comprehensive financial solutions".

The demerger plans have grabbed the headlines away from a solid set of 2017 results for Prudential Plc.

John Foley, who heads M&G Prudential, will steer that business through the demerger and investors will hold shares in both at the end of the process.

The move will result in two separately listed companies that will each offer their own distinct investment products - according to a release, M&G Prudential will be an independent savings and investment provider based in London and led by chief executive John Foley, while Prudential Plc will continue as an worldwide insurance group headquartered in London but focusing on growth opportunities across the US, Asia and Africa, under group chief executive Mike Wells.




The transition to a Part VII transfer will see all of the underlying assets and policy liabilities transferred to Rothesay Life, subject to regulatory and court approval.

Pic: ReutersLONDON: Prudential is to spin its British and European business off from its worldwide operations, breaking up the 170-year-old insurer in the latest shake-up in a fast-changing industry.

"Captive asset managers embedded within life offices are rarely fully-reflected in the parent's valuation and the move should give M&G increased strategic flexibility in charting its own destiny over the long run", said Hollands.

Once the proposed split is complete, Prudential said it expects both companies to be big enough to feature on Britain's benchmark FTSE 100 stock index.

The FTSE 100-listed firm's move follows Standard Life's merger with Aberdeen Asset Management in 2017 which led Standard Life Aberdeen PLC (LON:SLA) last month to unveil the sale of the bulk of its insurance business to Phoenix Group PLC (LON:PHNX).

Commenting on the results, Mike Wells, Group Chief Executive, said, "Our clear, consistent strategy, high-quality products and constantly improving capabilities have enabled us to deliver excellent progress across the Group, led by double-digit growth in our Asia business". This is a testament to the quality and strength of our business, our focus on customer service, our execution proficiency and the support we receive from our shareholders.


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