Monday, 6 November 2017

Prudential fires starting gun on break-up of £10bn UK annuities book

Prudential has fired the starting gun on a four-way break-up of a £10bn UK annuities book that could herald a broader exit by Britain’s largest insurer from its home market.
Sky News has learnt that the Prudential has begun contacting potential buyers of chunks of the pension annuities business in the last few weeks.
The company has informed them that a £10bn portfolio will be divided into four parcels of between £2bn and £3bn each, according to briefed on the company's plans.

The packages being earmarked for sale by the Prudential comprise different profiles of assets to appeal to a range of buyers, they added.

Specialist buyers of pension assets such as Rothesay Life, Legal & General and Pension Insurance Corporation are expected to be among those interested in bidding for the annuities business.

The sale process will be closely watched by investors, both to discern the Prudential chief executive Mike Wells' intended use of the capital generated by it, and for clues about the company's longer-term ambitions about its presence in Britain.

The FTSE-100 insurer was founded in 1848, and now has a major presence in the US and Asia, where it is the region's second-largest life insurer.

It would have become by far the biggest player in the Far East if a $35bn takeover bid for AIA in 2010 had been successful, but the deal ultimately blocked by investors.
The Prudential has since withdrawn from the UK retail annuities market and has been reviewing its back-book amid new, more capital-intensive, regulations.

SKY       News.

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