Prudential’s next chief executive will be based in Asia for the first time after Mike Wells announced he was stepping down after seven years at the helm of Britain’s largest listed insurance company.
The decision to locate the top job in Asia cements the group’s move to the region and follows a sweeping shake-up overseen by Wells, who will leave the company at the end of March.
Mark FitzPatrick, chief financial officer of Prudential, will become interim chief executive until a permanent appointment is made.
Wells spun off UK operation M&G in 2019 and spun off US firm Jackson last year under pressure from activist investors. What remains is an insurance company focused on the faster growing markets in Asia and Africa.
Shriti Vadera, president of Prudential, said Wells had “steered the group through one of the most significant periods of change in its 174-year history”.
“Given Prudential’s focus on growing markets in Asia and Africa, the Board has decided, with this managed transition of the leadership structure, that the roles of Group CEO and the group’s chief financial officer will be based in Asia, where Prudential’s largest businesses, the group’s regulator and the rest of the management team are located,” she added.
The decision to base the chief executive and chief financial officer in Asia will sever most of the group’s remaining ties with the UK, where it was founded.
The company recently increased Asian representation both in its shareholder base and on its board of directors. Last October, it raised $2.4 billion in an equity offering in Asia. In May, he added a trio of Asian executives to his board, including banker Jeanette Wong and Ming Lu, head of KKR’s Asia-Pacific business.
M&G still has a life insurance operation which trades under the Prudential brand in the UK.
FitzPatrick, who has served as chief financial officer since 2017, has asked not to be considered for the permanent chief executive position and will leave the group once Wells’ successor is in place. James Turner, who is currently chief risk and compliance officer, will replace FitzPatrick as chief financial officer.
Prudential said it would consider internal and external appointments for the chief executive. Nic Nicandrou, a former chief financial officer of Prudential who leads the Asia business and is already based in Hong Kong, will be one of the main candidates.
The insurer did not specify where in Asia the new managing director would be based. The group’s regional headquarters and largest Asian business are located in Hong Kong. Its ambitions in China, where it has a rapidly growing business, may also affect its decision on where the new CEO will be based.
However, the movement of businesses to and from the territory has been greatly disrupted by the pandemic. This has had an effect on Prudential’s insurance business, which has traditionally served mainland Chinese customers from Hong Kong as well as local customers.
Dual-listed Prudential has a common head office, with many of its operational functions based in Hong Kong and the staff handling its UK listing are based in London.
“With the entire management team now based in Asia, this will likely lead to further questions about the strategic rationale for its joint London and Hong Kong headquarters model,” said Citi analyst Andrew Baker. .