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Pru seeking new high-street deal

Prudential is looking to sign another deal with a major high-street bank to boost its distribution post-depolarisation.

In an interview with Cantos last week, Prudential chief executive Mark Wood confirmed that the insurer is looking to multi-tie with another bank.

The move follows the success of its deals with Abbey in 2002 and more recently with Lloyds TSB and Alliance & Leicester to distribute protection products.

Wood sees the market shifting towards tied advice in the next few years and thinks most IFAs will opt for the multi-tie route post-depolarisation.

The new reporting regime shows Pru&#39s with-profits fund had free assets of £5.1bn at the end of 2003 and its risk capital margin was just below four times from capital within the fund.

Following Legal & General&#39s announcement that it is reviewing its position in with-profits, Wood said the Pru remains firmly committed to with-profits and its £60bn fund, and intends to sell more of the products in the future.

Despite its intention to slim down its product range, the group is launching a private medical insurance product in conjunction with South African health insurer Discovery.

Wood said: “You can see the effect of our most recent distribution deals in our first quarter numbers but clearly we want to go further. The multi-tie with a major bank remains an imperative for any large provider.”

Independent life insurance analyst Ned Cazalet says: “Even though the with-profits sector is decreasing, if L&G does exit the market, I am sure many of the building societies may see depolarisation as an opportunity to review their position. I think ties may be realigned and rearranged to the Pru&#39s advantage, which has been quite clear about its strategy.”

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