Oh dear - bye bye London.
http://www.thesundaytimes.co.uk/sto/...icle877612.ece
http://www.thesundaytimes.co.uk/sto/...icle877612.ece
A crackdown by Brussels has driven Britain’s biggest insurance company to prepare for shifting its headquarters to Asia
Prudential was founded in London 163 years ago but could now leave the capital (Chris Young)
Prudential, the £18 billion British insurance giant, is examining plans to move its headquarters from London to Hong Kong.
Tidjane Thiam, the chief executive, is understood to have ordered the review in response to tough new European regulations due to come into effect next January.
Prudential, founded in London 163 years ago and Britain’s biggest insurer, is expected to admit to the review in the fine print of its annual report.
A decision to move the company’s headquarters out of Britain would be a symbolic blow to the City, damaging its status as the global centre of the insurance industry.
However, it would come as a relief to some shareholders, who have been pushing for a move closer to the heart of Prudential’s biggest market, Asia.
Thiam has been a vociferous critic of the new rules. The regime, known as Solvency II, will require European insurers to increase their capital requirements — the amount they must keep available to reduce the risk of insolvency.
At the World Economic Forum in Davos last month, Thiam said the new rules would force Prudential to dispose of £11 billion of investments in British infrastructure projects. It would also force the company to reduce the amount it lends to banks.
The rules have already been broadly attacked for the additional costs that they would impose on pension annuities. However, it is understood that there is a much bigger problem for Prudential lurking in the proposals.
A conflict between American insurance regulations and the Solvency 11 rules would force Prudential to hold billions of pounds in additional capital to protect its American business, Jackson Life, one of the largest life insurers in America.
The Financial Services Authority is believed to have told Prudential to prepare documents illustrating how it would deal with this element of the new rules — including proposals to relocate its headquarters to Asia.
Only the British part of the group would then be subjected to the Solvency II rules.
Prudential has previously insisted that a break-up of its business would make no financial sense. The group’s credit rating could also be affected if it attempted to sell the British business or Jackson Life.
Prudential was founded in London 163 years ago but could now leave the capital (Chris Young)
Prudential, the £18 billion British insurance giant, is examining plans to move its headquarters from London to Hong Kong.
Tidjane Thiam, the chief executive, is understood to have ordered the review in response to tough new European regulations due to come into effect next January.
Prudential, founded in London 163 years ago and Britain’s biggest insurer, is expected to admit to the review in the fine print of its annual report.
A decision to move the company’s headquarters out of Britain would be a symbolic blow to the City, damaging its status as the global centre of the insurance industry.
However, it would come as a relief to some shareholders, who have been pushing for a move closer to the heart of Prudential’s biggest market, Asia.
Thiam has been a vociferous critic of the new rules. The regime, known as Solvency II, will require European insurers to increase their capital requirements — the amount they must keep available to reduce the risk of insolvency.
At the World Economic Forum in Davos last month, Thiam said the new rules would force Prudential to dispose of £11 billion of investments in British infrastructure projects. It would also force the company to reduce the amount it lends to banks.
The rules have already been broadly attacked for the additional costs that they would impose on pension annuities. However, it is understood that there is a much bigger problem for Prudential lurking in the proposals.
A conflict between American insurance regulations and the Solvency 11 rules would force Prudential to hold billions of pounds in additional capital to protect its American business, Jackson Life, one of the largest life insurers in America.
The Financial Services Authority is believed to have told Prudential to prepare documents illustrating how it would deal with this element of the new rules — including proposals to relocate its headquarters to Asia.
Only the British part of the group would then be subjected to the Solvency II rules.
Prudential has previously insisted that a break-up of its business would make no financial sense. The group’s credit rating could also be affected if it attempted to sell the British business or Jackson Life.
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