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EDITIONS
Thursday, 17 October, 2002, 16:11 GMT 17:11 UK
Pru's overseas shift pays off
Prudential's building in Euston, London
Prudential has managed to offset slowing UK sales
Insurance group Prudential has reaped the rewards of shifting its focus outside the UK, with strong gains in Asia and US trade.

Prudential, the second largest British life assurer, said 75% of its sales now come from outside the UK.


Our strategy of growing internationally...has once again been fully endorsed

Jonathan Bloomer, chief executive, Prudential
This has helped offset a weak domestic market this year, where poor insurance sales and a slowing demand for savings products has followed the stock market's collapse.

The good news cheered investors, sending Prudential shares up almost 11%.

Prudential stock, whcih has lost 45% of its value over the last year, closed up 31p, or 7.1%, at 467p on Thursday.

Strategic shift

Prudential was reporting on its performance for the first nine months of the year.

Chief executive Jonathan Bloomer said the company's decision to expand overseas had paid off:

In the nine months, Prudential reported a 6% increase in overall sales to 481m.

However, total UK insurance sales were down 17%, while those in the US jumped 35% and those in Asia were 16% higher.

"Our strategy of growing internationally...has once again been fully endorsed," said Mr Bloomer.

He added that there were significant opportunities for Prudential's Jackson National Life unit in the US, where the company is considering making acquisitions.

Market cheer

Alistair Smith, insurance analyst at Fox-Pitt, Kelton, said the UK performance was "surprisingly good", welcoming the US result as "a real surprise".

The figures helped demonstrate that not all insurers were suffering.

Rivals groups Legal & General and Aviva have recently reported tough conditions and a number of companies, including Prudential, have been forced to cut bonus payments to policy holders because of the falling value of shares.

Not spared

Despite Prudential's healthy update, fund managers remained wary.

"I'm holding Pru but I'm not putting any more money in it," said Jenny Campbell, a fund manager at Gerrard.

Last month, Prudential announced 850 job cuts in the UK, at its call centre in Reading, and said it was transferring the work to India.

The company has also announced that it is closing its final salary pension scheme for new employees.

See also:

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