Gherkin To Gobble Up Pru
It is reported that Swiss Re, the Swiss financial group known for the Gherkin in London, is to buy a large part of the UK operations of Prudential for around £5BN.
Swiss Re is reported to have offered to buy the closed life fund business of Prudential. The closed funds contain existing insurance policies, but no longer have new policies added to them.
The approach was made last month on the heals of Mark Tucker's, the CEO of Prudential, plans to shake up the Pru's underperforming UK operations.
Prudential's UK closed life book includes with profits policies and endowment mortgages. The value is estimated to be around £5BN.
The approach has raised questions about the Pru's commitment to Britain. There are rumours that some investors are keen for Tucker to scale back in Britain and concentrate on the faster growing business in Asia and the US.
The sale would give the Prudential £1.5BN. The value of with profits policies is split between shareholders and policyholders. Under the sale of a with profits business, shareholders receive a lump sum to account for the future profits they would have received from the policies.
Swiss Re has bought a series of closed life funds in America, and in Britain it bought Life Assurance Holding Corporation.
Nice to see that someone can make money out of the useless and underperforming endowment policies that were foisted on the unwary British public in the 1980's.