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News and Media

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Prudential may move headquarters out of the UK

By John on Monday, February 27, 2012 0 comments


The Prudential, the UK's biggest insurer, is considering moving its headquarters out of the UK to escape tougher new capital rules for insurers.

The company said in a statement that there was uncertainty over the planned new rules, called Solvency II.

It acknowledged there had been long-running speculation that it could move its base and said it regularly reviewed its position.

Prudential makes 45% of its sales in Asia.

Hong Kong is seen as a likely new base.

The company is worried that it could be forced to hold billions of pounds of extra capital.

Europe is planning new rules and US insurance regulations could see it having to keep back substantial sums of money against its US-based Jackson National Life unit if it keeps its headquarters stay in Europe.

Europe's Solvency II rules are due to come into force in 2014, and could mean that European insurers have to to hold extra cash reserves against subsidiaries in countries with less strict rules on reserves.

No decision has yet been taken on whether US capital rules for insurers are compatible.

The company statement said: "Prudential regularly reviews its range of options to maximise the strategic flexibility of the group. This includes consideration of optimising the group's domicile, including as a possible response to an adverse outcome on Solvency II."

It said there was uncertainty over the implementation of Solvency II and the implications for the group's businesses.

It added that "clarity on this issue is not expected in the near term"







source:http://www.bbc.co.uk/news/business-17175928

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