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Britain's top insurer sees profits rise

Friday, August 10 11:07:06

Prudential, Britain's biggest insurer, reported a 13 percent increase in its half-year profit today, helped by continued strong growth at its Asian and U.S. operations.

Prudential, which uses cash from its mature British business to fund expansion in the booming economies of south-east Asia, made an operating profit of 1.16 billion pounds ($1.81 billion)in the first six months of 2012.

Analysts had expected a profit of 1.13 billion pounds, according to a company poll.

"Prudential has produced a strong performance across our key financial metrics despite the considerable global macroeconomic challenges," Chief Executive Tidjane Thiam said in a statement. Prudential shares were down 0.8 percent by 0915 GMT, narrowly outperforming a flat Stoxx 600 European insurance share index. The stock is up 27 percent since the start of the year, outpacing the sector's 15 percent increase.

"They've modestly beat consensus, and Asia is powering ahead," said Investec analyst Kevin Ryan.

The 160-year old insurer, which warned in February it might quit Britain to avoid the European Union's proposed Solvency II capital rules for insurers, said it was still weighing up a potential move in case the new regime proves too onerous.

Prudential is concerned the new regulations could force it to raise capital requirements at its Jackson National Life business in the United States, making it uncompetitive against local rivals.

There has long been speculation Prudential could move to Hong Kong, irrespective of Solvency II, in recognition of its growing focus on Asia.

Thiam said the company was on track to achieve its target of doubling its 2009 operating profit in Asia by 2013. (C ) Reuters