Dublin, Luxembourg or Asia? Prudential looks to the post-Brexit future.
UK insurer Prudential may shift funds from its asset management business to Dublin or Luxembourg. The company is keen to maintain access to the European Union’s single market.
The UK’s decision to leave the EU negatively impacted Prudential’s share price. However, chief executive Mike Wells is confident that the company can weather the UK’s exit from the single market. Wells said Brexit will not have a material impact on the company. Prudential is concentrating growth efforts on Asia, and as a result, around a third of the insurer’s operating profit come from the Asian market.
“Asia has been and will continue to be the growth engine of this group,” said Wells.
Prudential’s Asian growth offsets Brexit uncertainty
Prudential’s fund management division M&G may seek to increase the number of its funds in Dublin and Luxembourg. Asset managers need an EU base to sell investment funds to European retail investors. It is not yet known if this regulation will remain in place once the UK has exited the EU. Therefore, the company has to prepare for the future, M&G chief executive Anne Richards told reporters.
“What we are trying to do is… give ourselves options so we are in a position to react and adapt,” she said.
M&G said it was looking at expanding its operations in Dublin shortly after the Brexit result.
The company reported six percent rise in first-half operating profit. This was led by Asian growth. Growth in Asia has helped to offset lower profit from M&G. In addition, Prudential recently made a purchase in Zambia. The group may look to expand in the African market and also in the United States.