Pru considers moving its HQ to Hong Kong
PRUDENTIAL, Britain’s biggest insurer, is considering moving its headquarters, possibly from London to Hong Kong, to escape tough new capital rules for European insurers.
Last night Prudential said it “regularly reviews” its options to “maximise the strategic flexibility of the group”.
It added: “This includes consideration of optimising the group’s domicile, including as a possible response to an adverse outcome on Solvency II.”
Prudential is concerned a conflict between Europe’s Solvency II regime and US insurance regulations could force it to hold billions of pounds of extra capital against its US-based Jackson National Life unit if it remains domiciled in Europe.
Solvency II, due to come into force in 2014, could force European insurers to hold extra cash reserves against subsidiaries operating in countries that have less exacting capital standards.
This extra capital requirement would be waived for countries whose insurance regulations are deemed by European regulators to be equivalent to Solvency II. No decision has yet been taken on whether US capital rules for insurers are compatible.
Prudential said: “There continues to be uncertainty in relation to the implementation of Solvency II and implications for the group’s businesses. Clarity on this issue is not expected in the near term.”
There has been long-running speculation that Prudential could shift its headquarters to Asia in recognition of the region’s large and growing contribution to its growth.
Prudential generates 45 per cent of its sales in Asia, and has secondary stock market listings in Hong Kong and Singapore.