Partnership Approach to European Expansion
Prudential PLC
24 November 1999
PRUDENTIAL ANNOUNCES PARTNERSHIP APPROACH TO EXPANSION IN CONTINENTAL EUROPE
Prudential plc today announced the formation of Prudential Europe, a new
operating division for the development of retail financial services in
continental Europe. Prudential also announced the formation of strategic
alliances with CNP Assurances, France's largest life company and Signal Iduna,
one of Germany's leading life and health insurers.
Sir Peter Davis, group chief executive of Prudential plc and Gilles Benoist,
chairman of the management board of CNP, are today signing a Memorandum of
Understanding covering the provision of products, both in France and the UK,
and access to parts of each company's distribution networks in their
respective home markets. The agreement with CNP is non-exclusive and provides
for co-branding of products. Amongst the possibilities under consideration are
the sale of with-profits and unitised products. Further announcements will be
made during the course of next year.
In addition to product and distribution co-operation, the Memorandum of
Understanding contemplates future joint development work in France, the UK and
elsewhere in continental Europe where the combined resources of both companies
can deliver a more significant result than individual initiatives.
In Germany, Prudential and Signal Iduna have set-up a joint venture life
company based in Dublin to be administered by Prudential Europe Management
Services which will supply unit-linked products to Signal Iduna's 6,000strong
tied salesforce and to the Signal Iduna group's broker associates. The first
product to be sold under the joint venture will be a long term care bond but
the agreement with Signal Iduna provides for further cooperation in the
development of unit-linked products for the German market and the exploration
of market opportunities in other continental European countries where neither
of the parties has a presence or existing relationships. The agreement is
non-exclusive on both sides but provides for the co-branding with the
Prudential name of products resulting from the joint venture.
Scottish Amicable International already has a successful broker distribution
business in Germany, headed by Norbert Hanf. This business, which had a 3%
share of unit linked business in 1998, becomes part of Prudential Europe and
work has already begun on its expansion.
Prudential Europe's managing director is Chris Evans, former managing director
of Prudential's business in Thailand, who reports to Keith Bedell-Pearce,
Prudential's main board director responsible for international development and
chairman of Prudential Europe. In France, Arnaud Maggiar, formerly General
Manager for Zurich Financial Services' French life business, has been
appointed as head of country.
A new office has been set up in Paris and a draft application will shortly be
made to the UK Financial Services Authority to establish a branch of
Prudential Assurance in France. This would open up a number of possible
options, including the potential for products to be written out of the UK life
fund for sale in
France.
Sir Peter Davis, group chief executive of Prudential, said
'We have been working for some time on a strategic review of continental
European financial services markets. We have concluded that whilst there is
huge potential for growth, the major markets in continental Europe are likely
to undergo significant change over the next few years. Working in
partnership with key players in each of the major markets at this stage is
therefore by far the most attractive option for us. I am delighted that
Prudential has been able to develop strategic partnership arrangements with
such significant businesses as CNP and Signal Iduna.'
- ends -
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Notes to Editors
1. Prudential Europe will take over responsibility for the
business activities of Scottish Amicable International which
include the Dublin based life company Scottish Amicable
International Assurance plc and its associated support
services business, Scottish Amicable International
Management Services Ltd. The latter business has been
re-named Prudential Europe Management Services Ltd. It
currently employs 270 people in Dublin and last month
moved to new office premises in Dublin to support
Prudential Europe's expansion plans.
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