Insurer Prudential doubles profits in 2010

9th March 2011, Comments 0 comments

British insurance giant Prudential said Wednesday that its net profits more than doubled to £1.4 billion in 2010 as it shrugged off a failed takeover bid to post strong sales in Asia.

Prudential reported profit after tax of £1.43 billion (1.67 billion euros, $2.31 billion last year, compared with net earnings of £676 million in 2009, the group said in a statement.

The group last year failed in a $35.5 billion takeover of AIA, the Asian arm of US insurer AIG.

Prudential chief executive Tidjane Thiam welcomed the group's "very strong performance" in 2010 and said expansion in Asia would remain its priority.

"At the centre of our strategy is the acceleration of our profitable growth in Asia, which offers many of the highest growth and return opportunities.

"The emerging markets of South-East Asia -- such as Indonesia, Malaysia, Vietnam, the Philippines and Thailand, together with Hong Kong and Singapore -- are particularly attractive.

"They remain the priority destination for our new capital investment. With our compelling platform of distribution, brand and product development capabilities in the high growth markets of Asia, we believe we are particularly well positioned to take advantage of the considerable opportunity that the region offers," Thiam said in the earnings statement.

Prudential's share price shot to the top of London's FTSE 100 index in early trading, showing a gain of 3.5 percent to 739 pence. The FTSE was down 0.55 percent at 5,941.55 points.

Prudential added that its failed takeover bid of AIA, which collapsed last June, would cost the group a pre-tax sum of 377 million pounds, an estimate that was unchanged from six months ago.

Thiam, born in the Ivory Coast but with French nationality, had come under heavy fire from some shareholders over the failed takeover, who accused him of taking a huge gamble by making the bid just eight months into his tenure.

Thiam defended the bid as a potentially transformational deal that would have made Prudential the world's top non-Chinese insurer by market capitalisation, ahead of competitors Allianz and AXA.

It would also have transformed Prudential into an international insurance powerhouse but the high price asked by AIG caused a shareholder revolt and Thiam was unable to persuade AIG to lower its demands.

© 2011 AFP

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