British insurance giant Prudential announced today that it will split into two separate companies, with one focused on asset management and the other on insurance.
The 170-year-old firm said Wednesday it will demerge M&G Prudential, its U.K. and European business, leaving investors with shares in two separately listed companies with entirely different business models.
The demerger will create M&G Prudential, a savings and investment provider for UK and Europe, and Prudential plc, which will focus on insurance opportunities in Asia, the United States and Africa, the company said in a statement.
M&G Prudential will focus on its retirement and savings business in the U.K. and Europe, and will pursue a less-capital intensive structure, following new rules that require insurers to hold higher levels of capital.
Prudential will become a solely international firm, focused on the U.S., Asia and Africa, and will be led by current Chief Executive Mike Wells.
While Prudential’s insurance and asset-management operations in the U.K. and Europe have increased profit 7% annually over the past 10 years, its Asian operation has seen a 24% annual rise over the same period.
Prudential expects the region’s expanding middle class to continue to drive that growth by fueling demand for more savings and life and health insurance coverage. Mr. Wells said the region’s population is “underprotected” and offers an attractive growth opportunity.