Friends may buy to expand Asia insurance ops-exec

HONG KONG, Aug 28 (Reuters) - Friends Provident (FP.L) is on the lookout for potential acquisitions in Asia that could take it beyond the Hong Kong and Singapore markets, though no specific deals are in the works, an executive with the UK insurer said on Thursday.

Malaysia is a market in which the firm is "very interested", said David Knights, general manager, Hong Kong for Friends Provident International, who added that any deals would involve insurance rather than asset management businesses.

"There is nothing currently on the radar with regards to acquisition or with regards to strategic partnerships, but we are continually looking for an opportunity which we would see as the right fit," he told a media briefing in Hong Kong.

Friends, Britain's smallest blue-chip life insurer, was downgraded by Moody's on Wednesday, with the ratings agency citing challenges to its revised strategy.

The embattled firm has been overhauling its business since January, refocusing its core UK activities, cutting costs and putting non-core assets on the block, including its stake in fund manager F&C (FCAM.L).

Knights said the firm was still interested in expanding its core insurance business in more profitable and higher growth international markets like Asia. He said expansion in Asia could include buying into other organisations, manufacturing products for other companies or establishing itself in new markets.

But he added that the priority in Asia was the organic growth of existing operations.

Moody's said in a statement announcing the downgrade that Friends faces the challenge of significantly improving its performance amid tough market conditions.

"This applies not only in the UK ... but also in its less well-established international markets where the rating agency believes that Friends Provident's franchise is generally weaker than in the UK and where there exist large international as well as local competitors," Moody's said.

The firm's competitors in Asia include American International Group Inc (AIG.N), UK peer Prudential Plc (PRU.L), Canada's Manulife Financial Corp (MFC.TO) and ING Groep (ING.AS). (Reporting by Jeffrey Hodgson; editing by Jonathan Hopfner)