- By Region
Prudential is set to launch a business in Poland and is also considering a move into the Middle East, as the insurer looks to expand outside its core markets of the UK, US and east Asia.
The Pru is awaiting the go-ahead from regulators to start life insurance operations in Poland, re-entering a market where it had a business before the second world war. The business’s assets were seized by the Nazis in 1939.
A possible move into the Middle East – including Egypt – is also on the agenda for the FTSE 100 company. Prudential considered entering Egypt before the Arab spring of anti-Mubarak uprisings.
However, those proposals are at a much more tentative stage than for Poland, and no firm decision has been taken.
Prudential will not necessarily divulge the expansion proposals – which are more likely to be organic rather than by way of acquisitions – when the FTSE 100 company discloses half-year results next week.
Analysts expect continued growth in Asia to helped boost operating profits 6.5 per cent to £1.13bn.
The planned move into Poland, whose capital Warsaw has an Art Deco skyscraper named after the Pru, is symbolically significant for the UK life assurer.
The company wound down its insurance operations in Continental Europe about a decade ago, selling its German operations in 2002 and stopping writing new business in France a year later.
Instead the Pru has expanded into fast-growing emerging markets in Asia, recently securing regulatory approval to operate in Cambodia.
But the insurer’s ambitions for European expansion are for now confined to Poland, where it is hoping to capitalise on forecast economic growth of about 4 per cent a year until 2015.
Prudential would be joining what Richard Baddon, insurance partner at Deloitte, described as a “land grab” by western insurers in Poland, which has the largest population of European Union countries in central and eastern Europe.
The new operation would be taking on multinationals including Aviva and Aegon as well as domestic competition in the form of PZU.
Tidjane Thiam, chief executive, has talked about the company’s “sweet spot” as southeast Asia. But the company also has assets elsewhere in the continent, including in India and China.
Western insurers that already operate in Egypt include Legal & General.
Mohammad Khan, an insurance partner at PwC, said: “Notwithstanding the political uncertainty, the life insurance industry in Egypt has been growing really fast and has the potential to continue to grow rapidly because of the relatively low penetration rates.”
Prudential said in a statement to the Financial Times: “Poland is a country that we believe offers us opportunities that play to our strengths from a product and distribution perspective.
“We are keen to develop a presence in the life insurance market there.”