U.K.’s Prudential Takes Taiwan Stake as Worldwide Sales Increase

Describing the overall environment as “really challenging,” U.K.-based financial services group Prudential plc has reported a 5% increase in total 2008 group insurance sales to 3.02 billion pounds (3.42 billion euros).

The group also announced an agreement that will see it transfer the assets and liabilities of its agency distribution business in Taiwan to China Life Insurance Co. Ltd. of Taiwan. That business includes Prudential's legacy interest-rate products in Taiwan. In return, Prudential has taken a stake in China Life Taiwan.

Prudential described its capital position as “strong,” with a total estimated Insurance Groups Directive surplus of 1.7 billion pounds.

Insurance sales in Asia rose 6% to 1.36 billion pounds. U.S. sales grew by 7% to 716 million pounds. Sales in the United Kingdom increased by 4% to 947 million pounds.

"Prudential has delivered a very good sales performance,” said Mark Tucker, group chief executive, in a statement. “We expect 2009 to be a challenging year and for global financial markets to remain difficult,” he said.

Tucker said the group will balance new business with capital conservation and the generation of cash this year.

According to Tucker, Prudential is confident of its growth potential in the Asia-Pacific region. The China Life Taiwan deal saw Prudential sell its legacy and agency businesses for a nominal sum of NT$1, but the group also invested 45 million pounds to take a 9.95% stake in the Taiwanese life insurer.

Tucker also suggested that Prudential will be on the lookout for other expansion opportunities, saying "we will evaluate carefully any strategic opportunities that arise from market dislocation."

(By Robert O'Connor, London editor: [email protected])