UPDATE 1-UK's Prudential keeps relocation option open
* Still weighing move pending clarity on Solvency II impact - CEO
* Nine-month new business profit 1.74 bln stg, up 13 percent
* Shares up 0.5 percent
By Myles Neligan
LONDON, Nov 14 (Reuters) - Britain's No. 1 insurer Prudential is keeping open the option of relocating outside the European Union to avoid potentially damaging new capital rules, it said on Wednesday.
The 160-year old insurer, which warned in February that the EU's proposed Solvency II regime might force it to quit Britain, will continue to consider moving until it is satisfied the rules won't hurt its business, Chief Executive Tidjane Thiam said.
"There were versions of Solvency II that would potentially be very damaging for our shareholders," he told reporters on a conference call.
"We have said we needed as contingency planning to consider a redomicile, and we have to keep our contingency planning going until we have clarity."
Prudential is worried Solvency II could impose a higher capital burden on its lucrative Jackson National Life unit in the United States, making it uncompetitive against local rivals.
There has been speculation Prudential could move to Hong Kong or Singapore, both seen as likely alternative bases due to the insurer's strong presence in Asia, where it gets nearly half its sales.
Solvency II, originally scheduled to come into force last month, has been repeatedly delayed because of disagreements between European governments over how it should apply to life insurers.
The industry and its regulators now say the rules, aimed at making insurers hold capital in proportion to the risks they cover and expected to usher in higher requirements for many, are unlikely to come into force until 2016 at the earliest.
Thiam was speaking after Prudential said new business profit for the first nine months of the year rose 13 percent to 1.74 billion pounds ($2.77 billion), narrowly beating the 1.68 billion pounds pencilled in by analysts in a company poll.
Profit from Prudential's flagship Asian markets was up 15 percent, against increases of 10 percent and 17 percent in the United States and Britain respectively.
Prudential wants to expand its presence in Asia as rapid economic growth has fostered an emerging middle class with strong appetite for savings and insurance products.
The insurer also said it was on track to achieve ambitious earnings growth targets it set itself two years ago, including a doubling of its 2009 Asian operating profit by 2013.
Prudential shares were up 0.5 percent by 1110 GMT, outperforming the broader FTSE 100 share index, which was 0.6 percent lower.
The stock is still up 34 percent since the start of the year, outpacing a 24 percent rise for the STOXX 600 European insurance share index
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