The Hindu Business Line : Prudential earns half its profits from Asia

HIGH GROWTH PROSPECTS: Mr Mark E. Tucker, Group Chief Executive, Prudential plc, and Ms Shikha Sharma, MD & CEO, ICICI Prudential Life Insurance, at a press conference in Mumbai on Tuesday. - Paul Noronha

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Mumbai Jan. 23 The Asian growth story is for all to see with the continent now accounting for a major chunk of the UK- based Prudential Plc's revenues.

"Asia now contributes 50 per cent of Prudential's profits and markets like India, Korea and China offer significant opportunities. In 1994-95, it was less than one per cent," said Mr Mark E Tucker, Group Chief Executive, Prudential Plc.

Prudential hopes to double new business profits from Asia by 2009. In terms of cash and statutory profits, Singapore, Malaysia and Hong Kong account for 75 per cent of the Asia business.

Prudential's Asian Life operations have registered a growth of 29 per cent in the first nine months of the fiscal.

The financial services major, which has a significant presence in Asia, the UK and the US, sees significant opportunities in India.

Prudential is present in India through joint ventures with ICICI Bank - ICICI Prudential Life Insurance and Prudential ICICI Asset Management Company and also runs a BPO-Prudential Process Management Services India Pvt Ltd. Mr Tucker said the Indian life insurance company, which grew at 95 per cent in the first nine months of the fiscal, is the fastest growing outfit for Prudential. "Although India accounts for just one per cent of our profits, we are growing in terms of scale and profitability. The insurance penetration is low, the economy is growing at 9 per cent and the demographics of age are strong," Mr Tucker said.

Public issue

On how soon ICICI Prudential would tap the capital markets and on whether Prudential would hike its stake in Indian life insurance venture to 49 per cent, when approved, Mr Tucker said "We will explore the issue when the time comes".

"Analyst valuations of the embedded value of ICICI Prudential range from $2.5-6 billion and we hope it continues upwards," he said. The embedded value of a life insurer is the present value of all future surpluses for that company, taking into account the reserves.

On acquisitions in India, Mr Tucker said the company was rapidly growing the organic way, but was open to acquisitions if they created value.

Prudential could enter the pension funds space once the regulations are cleared in India, he said.