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Pru sees 18% fall in intermediary sales

Prudential saw intermedia- ted sales fall by 18 per cent to 502m annual premium equivalent in the third quarter compared with 611m in the second quarter of 2005.

But group chief executive Mark Tucker pledged 170m to fund new business acqui- sition in 2007.

The insurer still has a 770m war chest from its 1bn rights issue but is holding fire over the next 12 months amid concern over pricing in the increasingly competitive annuity and protection markets.

The outcome of Prudential’s strategic review disappointed the City last week after Tucker said the company will cont- inue to pursue his ousted predecessor Jonathan Bloomer’s plans. Prudential was the biggest faller in the FTSE 100 – down by 2 per cent – after reporting on October 26.

Shares in its majority-owned internet bank Egg also fell by just over 2 per cent on the news that Tucker intends to hang on to it and is considering buying out the 21 per cent outstanding shares, albeit through equity rather than cash.

He also ruled out any sale of US subsidiary Jackson National Life, which has taken flak from investors for its perceived lack of scale, saying it is well placed to benefit from the 77 million baby-boomers set to reach 60 in the next few years.

The most notable diversion from Bloomer’s strategy will be an attempt to better integrate its UK businesses, Prudential, M&G and Egg, in a bid to boost cross-selling opportunities.

The update was given along with results showing total group insurance sales were up by 33 per cent to 10.8bn year on year and UK and Europe sales were up by 34 per cent to 700m on the third quarter of last year.

Tucker says: “There is little or no collaboration between the three UK businesses and there is value in looking at them more holistically on a revenue and cost basis.”

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