14 March 2018Insurance

Fitch downgrades Prudential on UK demerger

Fitch Ratings has downgraded the long-term ratings of UK-based life insurance group Prudential following the company's decision to separate its UK & European businesses (M&G Prudential) from the rest of the group.

Prudential plans to demerge its UK & Europe business from the US, Asia and Africa business, creating two separately-listed companies.

Rating actions include a downgrade of The Prudential Assurance Company Ltd's (PAC) and Prudential's US subsidiaries' (collectively Jackson) Insurer Financial Strength (IFS) Ratings to 'AA-' from 'AA'.

Fitch believes that the demerger announcement crystallises Prudential's strategic intent to separate M&G Prudential from the relatively higher-growth US and Asia-Pacific businesses. Fitch has concluded that the Prudential Assurance Company (PAC), the main insurance operating subsidiary of M&G Prudential, will no longer be treated as "Core" to the Prudential group under the agency's group rating methodology. Fitch now rates PAC and and the US life business Jackson separately.

The ratings agency noted that the demerger plan removes the company’s global diversification benefits. In addition, PAC's profitability has not grown as strongly as Jackson and Prudential Corporation Asia.

Join us at Intelligent Automation in Insurance - London 2018. Spring Special:  Book before March 31st and save £200. 

More of today's news

Starr reveals leadership shake-up in casualty unit

Marsh joins B3i blockchain rival Ethereum

Cigna rating placed under review due to debt burden

Prosperity Life private equity owners sell the business

Don't miss our insurtech email newsletter - sign up today

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Insurance
16 March 2018   S&P Global Ratings has downgraded UK-based multiline insurance group Prudential by one notch due to the company’s demerger plan while downgrading the UK operations by two notches.
Insurance
14 March 2018   UK-based life insurance group Prudential is to demerge its UK & Europe business (M&G Prudential) from the US, Asia and Africa business, creating two separately-listed companies.
Insurance
14 March 2018   Specialty re/insurer Canopius has appointed Laurie Davison as group chief operating officer (COO) and Nigel Meyer as group chief financial officer.