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Prudential may move headquarters to Hong Kong

Prudential is looking at plans to switch its main headquarters from London to Hong Kong in response to regulatory burdens from Solvency II.

In a statement released this morning, Prudential revealed that it is looking at switching domicile as part of a range of options to “maximise the strategic flexibility of the group”.

The statement says: “This includes consideration of optimising the group’s domicile, including as a possible response to an adverse outcome on Solvency II.



“There continues to be uncertainty in relation to the implementation of Solvency II and implications for the Group’s businesses. Clarity on this issue is not expected in the near term.”

Prudential was founded 163 years ago and remains the largest insurer in the UK. Some Prudential shareholders have been pushing for the move as Asia is now its biggest market.

According to reports, the move is being initiated by chief executive Tidjane Thiam in reaction to the new Solvency II regulations, which are set to come in next year.

Speaking at the World Economic Forum last month, Thiam said the new Solvency II rules would force the company to dispose of £11bn of investments into UK infrastructure projects as well as reducing the amount it lends to banks.

A conflict between insurance regulations and the Solvency II rules would also force Prudential to hold billions of pounds in additional capital to protect its American life insurer business, Jackson Life.

The Sunday Times says the FSA is understood to have told Prudential to prepare documents illustrating how it would deal with this element of the rules, including the potential to relocate to Asia.

Prudential has previously stated that a break-up of its business would make no financial sense.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. Strangulation by regulation..

    UK PLC on its last gasp?

  2. It would be sad to see the Pru go but maybe our government will finally wake up to what the FSA is actually doing.

  3. This is European legislation. If you want to lynch the FSA at least have the manners to do it based on their own actions

  4. Soren – this is EU legislation. Nothiong to do with the FSA.

  5. Slack regulation got us into this mess in the first place so if companies like Prudential don’t like it maybe it is time for them to leave.

    I would rather have companies that are financially secure and operating within the rules rather than having another RBS or Lloyds/Halifax situation.

    We should also be very worried about big corporations becoming so big that they can dictate terms to government. We have massive mergers over the last 30 years to create these huge companies that are too big and we cannot let them fail without having drastic consequences for the rest of the market. So maybe it’s about time these large firms are broken up into smaller firms and surely know one company should be able to dictate terms to a regulator or government.

    I would encourage people to stop whingeing at the FSA or European regulator for the sake of it and realise that our industry has to change.

    After all do you really want to repeat the last four years – I for one don’t

  6. @ Peter Herd
    The FSA is so big it can dictate terms to gevernment.

  7. Will they change the name to Pludential?

    The man flom the Plu.

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