Prudential insists it is not in talks with any companies looking to snap up its UK business, adding that the arm continues to be core to the group.
UK chief executive Rob Devey admits the UK is far less attractive as a growth market than parts of Asia, where the firm will continue to focus despite its failed £24bn bid for AIA. But he says: “The group frankly does not work without the UK at its heart providing the cash and capital, stable results and supporting our credit rating. It was frustrating the months where there was all that speculation. There are plenty of businesses out there that would love to buy the UK business but there are no talks going on. It is simply not on the agenda.”
The group posted IFRS operating profits of £968m, up by 41 per cent year on year, and embedded value profits of £1.67bn, up 35 per cent.
UK operating profits were £449m for the first half on an EEV basis, up by 11 per cent year on year from £406m. On an IFRS basis, Pru’s UK operating profits were £330m, unchanged from the first half of 2009.
The insurer saw a 2 per cent fall in annuity sales to £112m from £114m in the first half of 2009 after restricting volumes to preserve capital. Devey adds that the company will continue with this strategy.
He says: “We have looked to manage the price-volume trade-off in annuities by focusing on our existing customers. For the foreseeable future, we are going to be keeping a lid on the volumes. It is the right shape for us. We have definitely lost market share but we are entirely comfortable with that.”
Pru revealed its bid for AIA cost £284m after accounting for tax relief of £93m.