Prudential to merge UK asset management, insurance arms

LONDON (Reuters): Prudential will merge its UK asset management unit M&G with its UK and European insurance divisions, it said on Thursday, as it posted a 5% rise in first-half operating profit.

Active managers such as M&G are facing pressure from lower-cost passive funds, driving a round of consolidation in the sector.

“Combining these businesses will allow us to better leverage our considerable scale and capabilities,” Chief Executive Mike Wells said in a statement.

The combined business manages 332 billion pounds ($430.44 billion) in assets for over 6 million customers, Prudential said.

John Foley, currently Chief Executive of Prudential UK&Europe, will become Chief Executive of M&G Prudential.

Anne Richards will remain Chief Executive of M&G and will be a deputy chief executive of M&G Prudential, alongside Clare Bousfield, CEO Insurance for Prudential UK&E.

Prudential’s operating profit rose to 2.36 billion pounds in the first half, boosted by growth in Asia and above a forecast 2.2 billion pounds.