Prudential Has No Plans to Move Headquarters From U.K.

Prudential PLC won't move its headquarters out of the U.K. any time soon, its new chief executive says.

Mike Wells, who moved to the U.K. in May after running Pru's U.S. division, Jackson National Life, has faced a round of speculation from media and analysts since he took over that he could split the company or move its headquarters abroad to lessen the impact of European capital regulations.

But on a call to discuss financial results on Tuesday, he said Pru, one of the biggest insurers in the U.K., the U.S. and Asia, benefits from being based in London. "Put it this way, I've bought property [in London]," he said. "Unless something changes, our heads are down and we're working." Mr. Wells previously lived in Lansing, Michigan, where Jackson is based, and owns a cattle farm in Tennessee.

Jackson is deliberately not selling as much insurance as it could, he said, to avoid taking too much risk. It is the U.S.'s biggest provider of variable annuities, many of which track stock indexes, and is diversifying its mix of products. Excluding the effect of the strengthening dollar, Jackson's annual premium equivalent—its total sales—fell to £ 1.28 billion ($1.93 billion) in the first nine months of this year, down 5% from a year earlier.

In Asia, Pru's sales increased 31% to £ 2.02 billion despite stock market volatility over the summer triggered by doubts about the Chinese economy. Although the company has little direct exposure to China, the slowdown across the region means it is taking longer to close sales, Mr. Wells said.

"If you're retiring, you take a little bit longer deciding what you're going to do with that money…you are going to get a little bit more information, more advice," he said.

"That's the time when you want to expand," he added, "Growing when others perhaps aren't willing to…so that when it swings back, you're ready."

In the U.K., Prudential's most mature business, the insurance and savings market is in upheaval due to government policy changes that have abolished tax incentives forcing all savers to buy annuities when they retire. Instead, elderly Britons are buying income drawdown products and other retirement products. Overall, sales in the U.K. were up 21% to £ 762 million.

M&G, Pru's British asset management business, saw some customers taking their money out of bond funds due to fears about a possible rise in interest rates, pushing assets under management down 5% to £ 127.3 billion.

Total new business profit, a measure of future profitability from premiums sold now, increased 13% to £ 1.76 billion.

Write to Juliet Samuel at [e-mail]

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(END) Dow Jones Newswires

November 10, 2015 08:05 ET (13:05 GMT)

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