Profits rise in the East but the Pru's £1bn man stays loyal to London

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The Independent Online


"I'm not going to talk specifics, but we're clearly the prettiest girl at the party right now," says Barry Stowe, the smiling American who heads up Prudential's Asian business. "Pru is a great deal at the current price – I think any long-term investor would be very pleased."

Stowe's comments are in response to the continued speculation that Ping An, China's giant insurer, could be readying itself and its £7bn war chest to buy a stake in Prudential.

During his brief tenure, Stowe has built on the legacy left by Mark Tucker, now the Pru's chief executive, who laid the foundations in the region in the 1990s. Indeed, some analysts reckon Prudential's Asian business alone is worth the insurer's current share price of 650p.

Eighteen months ago, when he joined Prudential from AIG, Stowe had it all to lose, Asia having been the engine of growth for the company during some of its most difficult times.

After successfully batting away a bid from rival Aviva in 2006, Prudential continues to be at the centre of break-up talk, with the contrasting fortunes of the Asian and UK businesses all too apparent. The group's latest results will do little to quell such chatter, although Stowe is resolute that a break-up would be bad for the insurer.

"I think we benefit hugely from our relationship with the UK business," he says. "There remains a huge cachet in the region about working with a strong, established British company like Prudential."

On Friday, Stowe became a £1bn man, with the Prudential's Asian operating profits topping that landmark figure for the first time. Fifty-four per cent of group new-business profits now come from Asia, and he is on track this year to meet the target he inherited on his arrival – of doubling new business profits by 2009.

In marked contrast to the job cuts made by Prudential in the UK, Stowe's Asian operation last year employed 400,000 salespeople to push products across the region. The man from the Pru is very much alive and kicking in Asia.

Proving he isn't given to sentiment, Stowe also oversaw the sacking of some 35,000 Indian workers in a one-month period. "We give staff a year or so to become productive and in these cases it didn't work," he says.

But getting into India early has proved a smart move, although the country's rigid ownership rules are an obstacle to any foreign player.

The insurer's Taiwanese division, in turmoil on his arrival, was costing it millions. The situation has since been rectified, although Stowe refuses to say "resolved": "The minute you think things are sorted, they unravel."

Perhaps he has one eye on Prudential's operation in Japan, which remains tiny on the life-insurance side. "Nevertheless, we grew Japan by 183 per cent in 2007, which is dramatic progress." And if he continues to maintain his current run rate, the relative failure in Japan is unlikely to irk his bosses back in London too much.

Even so, the Pru's distinct East-West divergence is likely to mean that talk of break-up will continue for some time to come.

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