View from City Road: The Pru is wise to look East

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The Independent Online
Prudential Corporation has joined the clamour of enthusiasm for emerging markets. The Pru made only pounds 5m in its Asian territories last year but it thinks it can see a huge potential market.

Britain's largest life insurer already has well-established businesses in Hong Kong, Singapore and Malaysia. Its 1,800-strong sales force generated premium income of pounds 193m in the region last year. Prudential hopes to build on this by establishing a joint venture in Indonesia, and by obtaining a licence in China.

Prudential is scarcely alone in regarding China as a source of 1 billion new customers for savings plans, but it is surely right in concentrating its efforts in South-east Asia rather than looking for expansion in overcrowded European markets. Whatever else it does, the European Union's third life directive is unlikely to produce a bonanza for British life companies.

It is perhaps just as well that the Pru can look for excitement in the Far East. The trend towards lump sum investment business, which has lower margins, and the cloud cast by personal pensions and other regulatory scandals make prospects in the UK a shade dull.