Prudential has strongly hinted it is set to relaunch directly into the protection market 11 years after it pulled its in-house offering, following the sale of its 25 per cent minority stake in the joint venture which houses the Pruhealth and Pruprotect brands for £155m.
In a statement to the London Stock Exchange this morning, Prudential branded the joint venture with South African business Discovery as a “financial interest rather that a strategic investment” adding that the sale opened the door for it to “re-enter this market in due course”.
Pruhealth and Pruprotect, which launched in 2004 and 2007 respectively, will be immediately rebranded as Vitality Health and Vitality Life, adopting the name of the key product offering across their range.
Speaking to FTAdviser, Phil Jeynes, head of account development at Pruprotect, emphasised there will be no change from a client perspective.
He said: “There are no product changes, all the servicing is done by Discovery. Pruprotect and Pruhealth will now come under the Vitality banner, with immediate effect.”
In July, Pruprotect announced that it had appointed Darrell Stone to a newly created post as it repositioned the business to focus on the single tie deals with advisers. Financial advisers labelled Pru’s move as “unique”, questioning why peers would want to cut off access to alternatives.
Prudential controversially left the protection market in 2003, withdrawing its acceptance of about 50,000 critical illness applications. Business had piled up as IFAs took advantage of relatively cheap premiums, and the insurer simply ran out of policies.
As at the time of writing, the protection sections of Prudential’s UK website continued to promote Prupotect’s life, serious illness and income protection products.
Jackie Hunt, chief executive of Prudential UK, Europe and Africa, said: “Prudential is proud to have built a successful UK health and protection business in partnership with Discovery over the past ten years.
“This success has enabled us to divest our stake in Pruhealth and Pruprotect on attractive terms for Prudential’s shareholders. The transaction will also give us the strategic and commercial flexibility to consider operating freely in the UK protection market in due course.
She added: “This would be fully in line with our stated strategy of developing the UK business and leveraging the group’s global expertise in risk-focused products.”
Prudential UK said it will work closely with Discovery to ensure a smooth transition and will continue to support the business for a transitional period.
donia.o’loughlin@ft.com
