Prudential looks to Asia for new growth

Prudential shares got a lift today after the insurer unveiled plans to double the value of its new business profits in Asia by 2013.

The market seems to like this idea better than the $30 billion (£19 billion) takeover of AIA, the Asian business of US insurer AIG, in the region, an audacious bid that flopped on investor concern that it was overreaching. The eventual cost to shareholders of the failed bid was £450 million.

New business profit is a term used in the insurance industry to show how much premiums grew in a specified period, and is used because costs tend to be higher at the start of a policy's lifespan, which could distort actual earnings.

Asia has fuelled much of Prudential's business in the past few years where insurance spending remains low when compared with developed markets such as Britain.

The company reported a stronger-than-expected 17 % rise in third-quarter sales in November, helped by strong growth in its flagship Asian markets.
The insurer's shares gained 25p to 591p, nearly 5%.