Prudential exits Taiwan; gains 10% share in China Life

UK insurer Prudential Plc has sold off its insurance venture in Taiwan, making it the second foreign firm to sell up in the country recently. Taiwan’s China Life has agreed to buy most of Prudential’s local insurance business while offering 10% of its own shares to the UK giant. Prudential will take up the offer to buy 10% in China Life. Dutch-based financial services group ING recently raised US$600mn by selling its Taiwan subsidiary, also to a local firm, Fubon Financial. Industry sources claim other foreign investors in the country, including AIG and Aegon, are also looking for buyers for their local insurance units. Prudential’s exit from Taiwan is in part driven by heavy losses at the local operation over the past few years. Prudential’s PCA Life Assurance Co reported a loss of $115mn in the last three quarters of 2008 following on from a loss of $89mn in 2007. Over the past four years, the insurance unit has only made a profit once for the wider Prudential group. In 2006, PCA Life Assurance Co recorded net profits of $63mn. PCA Life Assurance has a 2.7% share of the local insurance market in Taiwan.