OK, let’s be blunt about this, it is concerning Prudential seems to be planning to relocate to Hong Kong, a destination widely suggested as the insurer’s new home. In particular, this raises doubts over the future of M&G, Prudential’s UK asset management business.
On Monday, Prudential released a formal statement confirming they are considering a move out of the UK in response to an “adverse outcome” of Solvency II. The ruling, due to come into force in 2014, could mean European insurers have to hold extra cash reserves against subsidiaries in countries with less strict rules.
The concern being, if Prudential is looking to relocate in search of less stringent solvency rules then this raises serious concerns over the fundamental health of the business; and in turn, will raise grave concerns over the future of the UK business and particularly M&G.
Prudential has attempted to appease shareholders by increasing dividend.
I will keep you posted on this matter as M&G, were the founder of the Unit Trust industry in 1962 and is a very well-respected UK asset management company.
Any questions, please email me at welshmoneywiz@virginmedia.com or add comments below
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