Ambitious focus
pays dividends
Prudential International
Assurance has bucked
the trend while the global
financial crisis hogs all
the headlines. For the first
nine months of 2008, it
reported a 41% increase in
its offshore business sales
compared with the same
period in 2007, with total
annual premium equivalent
(APE) sales of £48m.
The firm is reaping
the rewards of improving
its product range for
the important UK market
with the launch this March
of the Portfolio Account,
its new open architecture
bond. Its success this year
is a marked improvement
on 2007, when its UK sales
volume fell back to 2004
levels in a growing market.
Prudential International
has also been building its
cross-border European
business, with growing
success in Germany, a
market with which it has
long-standing connections.
l History lesson
The Prudential Group
acquired a cross-border
life company – Scottish
Amicable European in
Ireland – as a result of its
1997 purchase of the UK
insurance group, Scottish
Amicable.
Scottish Amicable European
was one of the first
international life companies
formed in Dublin
under the International
Financial Services Centre
(IFSC) regime. It was one
of the most innovative
companies in the market
with its Long Term Care
Bond combining the tax
features of an offshore
bond with a trust to secure
inheritance tax (IHT)
advantages to fund longterm
care provision.
It also embarked on one
of the first and most adventurous
freedom of services
entries into a continental
European market under the
Third Life Directive after
its implementation in July
1994. By the time of its
sale to Prudential in 1997,
Scottish Amicable European
had more than 300 employees
in Germany. A branch
Annual APE sales by region (£m)
COMPANY PROFILE PRUDENTIAL INTERNATIONAL ASSURANCE
operation was also established
in France.
l Continental shift
Prudential made structural
changes following its
takeover, with Scottish
Amicable European becoming
Prudential Europe in
1999. At that time, it provided
products for the UK
market, and manufactured,
controlled and distributed
Prudential’s products in
Germany on a services
basis and in France on an
establishment basis.
Following a strategic
review, the German life
business was sold to
’04 ’05 ’06 ’07
UK 32.23 39.98 47.84 32.82
Europe (ex UK) 9.72 13.09 7.96 13.52
Middle East 0.92 1.05 0.31 0.29
South America – – – 0.12
Rest of world 7.57 1.19 0.9 0.3
Total 50.45 55.32 57.01 46.95
Source: Prudential
Sales growth by product type
%
120
80
40
-40
0
’04
Source: Prudential
’05
’06
Single premium
Regular premium
DECEMBER 2008 [www.international-adviser.com] INTERNATIONAL ADVISER
’07
Prudential International Assurance
is blazing a trail with the success of
its newly launched UK product range
and its tightly targeted European
market strategy
Canada Life Europe in
2002. In 2003, Prudential
announced that it would
no longer write new business
in France. The
Prudential Europe branding
was dropped and the
company has since traded
as Prudential International.
Perhaps the most significant
outcome of its strategic
changes was the adoption
of a much greater focus on
the UK market, using the
traditional strength of the
Prudential Group in its original
core market. Despite its
size and distribution coverage,
until this 2002 to 2003
realignment Prudential had
never punched its weight
as an offshore product provider
in the UK market.
l With-profits
In its early years as a crossborder
provider, Prudential
International relied on traditional
group competencies,
including its flagship
with-profits Prudence Bond.
Offshore with-profits have
always formed some part of
the cross-border life sector,
although the number of
providers has never been
extensive and the proposition
for UK tax-resident
policyholders has never
been clear or compelling.
But in times of volatility,
such as the 2000 to 2003
bear market, the appeal of
products that smooth or
control investment returns
share a universal appeal,
especially with bank customers
looking to place
Bryan Low, managing director,
Acuity Consultants
FACT FILE
Company name and parent
group: Prudential International
Assurance; Prudential
Assurance Company
Head office: Montague House,
Adelaide Road, Dublin 2,
Ireland, +353 1 476 5000
No of employees: 41
Core markets: UK, Germany,
Austria, Belgium
Key products:
� Portfolio Account
� International Prudence Bond
� Flexible Protection Bond
� Flexible Life Plan
Website:
www.pruadviser.co.uk/
international
29
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