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UPDATE 2-Business as usual seen at Prudential under new CEO Wells
May 1, 2015 / 11:30 AM / 3 years ago

UPDATE 2-Business as usual seen at Prudential under new CEO Wells

(Adds investor, analyst quotes, background)

By Carolyn Cohn

LONDON, May 1 (Reuters) - Investors and analysts expect business as usual at British insurer Prudential after it appointed internal candidate Mike Wells, head of the company’s U.S. arm, as successor to Tidjane Thiam.

The insurer set out targets at the end of 2013 to expand its Asian life and investment management businesses, fuelled by rising demand for insurance among Asia’s growing middle class.

Thiam, credited with delivering strong performance at the London and Asia-listed firm, stepped down in March to take the helm at Credit Suisse.

Eamonn Flanagan, analyst at Shore Capital, said Wells might work on closer links between the British, U.S. and Asian businesses, as well as with British fund management arm M&G.

“In terms of moving to the next stage, it would be good to have the divisions more integrated,” he said.

Wells joined Prudential’s U.S. Jackson arm in 1995 and has 29 years experience in life insurance and asset management, Prudential said in a statement on Friday. He will start his new role on June 1.

“I don’t think there will too many changes, given it’s an internal appointment,” said Nigel Yates, fund manager at NFU Mutual. “It’s been such a well-performing business, I‘m very happy with it.”

The FTSE 100 company’s operating profit rose 14 percent last year to 3.2 billion pounds ($4.9 billion), with a 21 percent jump in profits at Jackson to 1.4 billion pounds.

Prudential’s share price has risen 150 percent in the past three years. It showed little reaction to the announcement on Friday and was down 0.9 percent at 1524 GMT.

Prudential, the largest insurer in the FTSE 100 index with a market capitalisation of $65 billion, gets about a third of its operating profit from Asia.

In the United States, Jackson has been focusing on variable annuities, pension products which give a variable rate of income often above a guaranteed minimum level, rather than the fixed-rate annuities seen in the British pensions market.

“Wells saw a gap in the market in terms of variable annuities, he’s obviously an opportunist,” said Yates.

“Hopefully he will bring that sort of nous with him.”

$1 = 0.6542 pounds Editing by Pravin Char and David Clarke

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