Prudential bosses to operate from Asia as CEO Wells retires

(Reuters) -Insurer Prudential announced a management shake-up on Thursday, setting up a new base for its top executives in Asia rather than London, as Chief Executive Mike Wells plans to retire next month.

Prudential, which provides life and health insurance, said current finance boss Mark Fitzpatrick will become interim CEO. He has requested not to be considered for the CEO position, the company said.

The company’s chief executive and financial officers would be based in Asia, a region that has increasingly been in focus for Prudential during Wells’ tenure, following pressure from U.S. activist investor Third Point.

Prudential’s Asia headquarters are located in Hong Kong, though the group is domiciled in London.

“From our conversations with investors, it is clear that the lack of an Asia-based and focused management team has acted as a drag on the stock, particularly when comparing Prudential to key Asian peers,” JPMorgan analysts said in a note.

“This is an opportunity for Prudential to hire or promote a manager with local relationships and knowledge.”

Over his seven-year tenure, Wells oversaw two strategic demergers. Prudential now focuses only on Asian and African markets after offloading its U.S. business Jackson last September, following a spin-off of its UK and European business, M&G, in 2019.

Hedge fund Third Point, run by billionaire Daniel Loeb, had asked the insurer to break up into two businesses in 2020 and recruit top talent in Asia, where Prudential has had a presence since the 1920s.

Prudential started life in London in 1848, with “the man from the Pru” — Prudential agents — famous for selling insurance policies door to door.

Third Point had also called on Prudential to cut expensive London head office costs.

Prudential will retain “a cost-effective presence in London to support our listing, capital markets and reporting requirements”, a spokesperson said.

The insurer is conducting a search internally and externally for the successor to Wells, a former boss of Jackson, the company said in a statement.

James Turner, Prudential’s chief risk and compliance officer will become the CFO, succeeding Fitzpatrick, while Avnish Kalra, chief risk officer for Prudential’s Asian and African businesses, will succeed Turner.

Shares in the FTSE 100 group were up 0.6% at 1231 GMT.

About 67% of Prudential’s adjusted operating profit in 2020 came from Asia, rising 13% and boosting its overall 4% profit growth.

In Asia, the insurer entered talks in 2020 that could lead to it taking full control of its 50/50 joint venture with China’s CITIC as part of its strategy to sharpen focus on the region.

(Reporting by Arundhati Dutta and Yadarisa Shabong in Bengaluru, Selena Li in Hong Kong and Carolyn Cohn in London; editing by David Evans and Jason Neely)