Prudential Plc eyes takeovers, bank distribution pacts in Asia

HONG KONG (Reuters) - Britain's largest listed insurer Prudential Plc PRU.L is eager to make acquisitions in Asia and is eyeing distribution partnerships with banks in countries including Indonesia and Vietnam to boost growth, its Asia chief executive said.

FILE PHOTO: A ferry sails past an advertisement of Prudential Assurance under foggy weather at the Victoria Harbour in Hong Kong, China March 9, 2016. REUTERS/Bobby Yip/File Photo

The plans underscore Asia’s key role as a profit driver for the insurer, which is in the process of splitting itself into two.

Higher sales in markets including China, Hong Kong, India, and Malaysia are guiding Prudential toward its goal of doubling the Asian business in size every five to seven years.

“We are agency-focused in those markets, but we would love to do more on the distribution side,” Nic Nicandrou told Reuters last week, referring to markets including Indonesia and Vietnam. “We are on the lookout for right partners.”

Besides expanding their own agent workforce to distribute products, insurance companies in Asia have been vying to tie up with banks by paying hefty fees to tap lenders’ branch networks and digital platforms.

Prudential is also keen to acquire other insurance companies in the region, but there aren’t many sellers in the market, said Nicandrou.

Prudential and at least four other insurance companies have bid for Commonwealth Bank of Australia's CBA.AX majority stake in an Indonesian insurance venture, people with knowledge of the process said last month.

The British insurer declined to comment on the deal process.

Prudential is de-merging M&G Prudential, its UK and Europe life insurance and asset management business, into a separate business with a London listing. The remaining Prudential business will focus on Asia and the United States.

Responding to media reports that Chinese insurer Ping An 601318.SS is looking to buy Prudential's Asia business, the Asia chief executive said the insurer had not received any offer for the regional business.

Eastspring, Prudential’s Asian asset management business, has applied for registration of its wholly owned unit in China to manage non-retail funds and is expected to win approval in the current quarter, he said.

Prudential already has a joint venture with CITIC Group that manages retail funds in China, which is expected by asset management research firm Cerulli Associates to account for 49 percent of Asia’s total funds under management by 2020.

Prudential, which in July this year agreed to buy 65 percent of TMB Asset Management from Thai bank TMB PCL TMB.BK, also has a 50:50 life insurance business in China with CITIC.

“We can do some team lift-outs and bolt-on M&A there to grow our business and get a bigger share of the asset management market in China,” Nicandrou said, referring to Eastspring’s business.

Reporting by Sumeet Chatterjee; Editing by Muralikumar Anantharaman