Prudential to float US business Jackson

Prudential has revealed its plans to sell its stake in its US business through a stock market listing, a move intended to free up capital for expansion and diversification.

The insurer has begun preparations for a minority Initial Public Offering (IPO) of Jackson. Although it did not specify the timeline of the listing, Prudential said that will provide an update at its half-year results in August.

Headquartered in Lansing, Michigan, Jackson provides retirement products for industry professionals and their clients in the US.

Mike Wells, group chief executive of Prudential, said: “In order to diversify at pace, Jackson will need access to additional investment, which we believe would best be provided by third parties. Today we are announcing that preparations have commenced for a minority IPO of Jackson and we have already taken a number of management actions to support this path.

"We will now commence detailed engagement with our key stakeholders, with a view to ensuring that Jackson will have the capital strength as a separately listed business to support its continued success as a broad provider of retirement solutions for America’s ageing population.”

Paul Manduca, Chairman of Prudential, added: “Over the past nine months, Prudential has undertaken a significant amount of work with our advisors to assess our options for introducing third party finance into Jackson. The Board has determined that the preferred route to achieve this is to seek a listing of Jackson in the US in due course, subject to market conditions.”

Michael Falcon, chairman and chief executive of Jackson, said: “The US is the world’s largest retirement market with trillions of dollars expected to move from savings into retirement income products over the next decade. Jackson’s ambition is to play the fullest role possible in this through a strategy of diversifying its product range and distribution network. Over time, this is expected to lead to a more balanced mix of policyholder liabilities and enhance statutory capital and cash generation.”