Another day, another shakeup at British insurer Prudential.
The group's Asian arm yesterday (February 5) made an internal announcement about a restructuring that is expected to include changes to the investment team and staff cuts at the Hong Kong regional head office, according to well-placed sources.
A spokeswoman for Prudential Corporation Asia confirmed that the company was introducing a "new regional operating framework" that would hand more decision-making autonomy to the local, in-country business units.
"At the same time, the regional office will provide solutions that enhance local delivery and optimise PCA's overall business performance," she told AsianInvestor.
This move follows both the October completion of the demerger of Prudential’s Asia and US units from its UK businesss M&G and a year of upheaval at Singapore-based Eastspring Investments, PCA's fund management arm.
"Since the demerger ... Prudential has become an Asia-led group focused on growth," the spokeswoman said, adding that the new framework would help it achieve this.
As part of the changes, PCA’s regional chief investment officer, Stephan van Vliet, is being seconded to Eastspring in Singapore, and more switches and departures are expected across the business.
Other employees are also expected to move from PCA to Eastspring, one executive told AsianInvestor on condition of anonymity.
A Prudential spokeswoman confirmed van Vliet would be relocating and working with Eastspring CEO Seck Wai Kwong "to help deliver various areas of Eastspring strategy". She did not clarify what that would entail.
As regards the expectations about staff cuts and moves, the spokeswoman said it was "too early to confirm if/how it will impact jobs". Discussions are understood to be under way regarding how the new framework will pan out.
In any case, PCA has some 12,000 people in the region, she added, and intends to retain a large presence in Hong Kong as its regional HQ, where it has been operating since 1964.
That said, the changes will by definition mean PCA’s Hong Kong regional office loses some clout as the local business units gain more independence, said the unnamed executive and another source familiar with the insurer.
SIGNS OF CHANGE
Previous developments had already pointed in this direction, with PCA having started to install experienced and well-credentialed local CIOs across its major businesses from late 2016. They include Lena Teoh in Singapore, Ben Rudd in Hong Kong, Esther Ong in Malaysia and Novi Imelda in Indonesia.
It is understood that PCA wanted to give the local CIOs more autonomy over areas such as allocation and manager selection – and the past year's turmoil at Eastspring may have served to reinforce that view.
Another senior insurance executive familiar with the situation said of the latest shakeup: “I suppose this is the culmination of the [merger-related] changes at Prudential in the UK and [PCA chief executive] Nic [Nicandrou] executing on his view of what Pru needs to look like in Asia post-transition.”
Moreover, he said the protest-related upheaval in Hong Kong since June 2019 will have negatively impacted PCA’s profitability in the city, which is one of its key markets. “That would also play a part [in the changes being made].”
The spokeswoman said PCA "remains a resilient business, despite current market challenges such as coronavirus and recent events in Hong Kong".
The changes in Asia come as Prudential last week appointed a new group chairman in the form of Shriti Vadera, currently UK chairman of Santander. She will take up the role on January 1, 2021, overseeing the business containing the fast-growing Asian and US units. Vadera had missed out in the race to replace Mark Carney as governor of the Bank of England.