Prudential could still leave UK, warns Tidjane Thiam
Prudential’s chief executive has warned that efforts to soften new capital rules may not be enough to prevent the insurer moving abroad.
By Jamie Dunkley
4:38PM BST 09 May 2012
Tidjane Thiam, the group’s chief executive, said he remained concerned about the impact of Solvency II, which is set for introduction in 2014. Under the current proposals, Prudential’s US business – Jackson National Life – could be forced to hold more capital than its local rivals because it is owned by a European company.
Solvency II is being enforced to protect consumers by ensuring insurers hold sufficient reserves in proportion to the risks they underwrite.
However, some European insurers warn the rules will leave them at a competitive disadvantage to rivals based outside the EU. Despite some concessions from politicians, fears persist.
“We cannot say the issue is behind us,” Mr Thiam said. “What we want them to say is that the US has a good solvency regime so that we don’t have to change the way we run our business. They can resolve this with the stroke of a pen.”
His comments came as Prudential reported a 9pc growth in new business sales to £946m during the first quarter of the year, beating analysts expectations of about £930m, with Asia once again its largest contributor at £443m.
Reflecting on Andrew Moss’s departure as Aviva chief executive, Mr Thiam added: “I’m not in a position to comment on other companies, because we try not to give them airtime.
“However on a personal level, I worked at Aviva for six years and worked with Andrew – I wish him well for the future and pass on my sympathy.”
Prudential shares fell 2.5 to 708p.