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Pru scraps reattribution plans

Prudential has decided not to proceed with the reattribution of its £8.7bn inherited estate.

The provider has been investigating the possibility of carrying out a reattribution of its inherited estate in the wake of Norwich Union’s planned reattribution.

But Pru says it has concluded that maintaining the current operating model is in the long-term interest of both current and future shareholders.

Prudential was heavily criticised last week by the Treasury select committee for using £1.6bn of the estate to pay misselling costs. The FSA is consulting on banning providers from doing this in future.

Prudential UK & Europe chief executive Nick Prettejohn says: “Our with-profits fund has been consistently the top performing life fund in the UK for the past one, three, five and 10 years. Our overriding priority is to maintain the long-term financial security of the with-profits fund and to continue delivering strong performance for the benefit of our policyholders.

“After comprehensive and extremely complex analysis, we have concluded that our existing operating model is in the best long-term interests of both current and future policyholders and shareholders. This model continues to allow policyholders to share in any potential future distributions on a 90:10 basis.

“The whole of the Inherited Estate is required, and it will remain as the working capital of Prudential’s with-profits sub-fund, helping to support continued superior investment performance, security and the ongoing financial strength of the fund for the benefit of current and future policyholders.”


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