UK insurance giant Prudential is to discontinue writing new business in Japan from next month, citing the “local business environment and other factors over the past year”.
The announcement comes as the company’s other Asian operations are expanding rapidly, and have accounted for a growing percentage of its total profits.
In a statement, Prudential said PCA Life Insurance, as the eight-year-old Japanese subsidiary is known, “remains committed to serving existing customers”, of whom it said it had more than 170,000 at the end of September, with assets of Y178bn (€1.37bn, $1.96bn).
It added that the operation had enjoyed a “superior” solvency margin ratio of 1,262.3%.
A Prudential spokeswoman said Japan contributed 3% of the parent company’s total new business Annual Premium Equivalent.
Prudential’s Japanese asset management business, PCA Asset Management, is unaffected by the suspension of new business sales. It is among the largest foreign asset managers operating in the Japanese market.
“This decision will not impact the quality of service and support current, existing PCA Life customers will receive from the company,” Prudential said.
“PCA Life remains committed to meeting all existing policyholder obligations and to maintaining first-rate levels of service to existing customers.”
Prudential’s products had been sold into the Japanese market through a combination of intermediaries and bank partners, and included its Whole Life Medical Insurance, Variable Annuity, Whole Life Cancer Insurance, New Increasing Term Insurance, Term Insurance and Endowment Insurance ranges.
As reported here on 11 January, Prudential has entered into a partnership with Singapore’s United Overseas Bank as part of its continuing Asian expansion, and also agreed to acquire UOB Life Assurance in Singapore. The company’s Asian operations contribute almost half of the company’s total profits, and its chief executive Tidjane Thiam has stated his intention to continue to focus on the region.