Chinese middle class boosts Prudential's new business

By Carolyn Cohn

LONDON (Reuters) - China's growing middle class boosted Prudential's new business profit in the first nine months, the British insurer said on Tuesday, though worries about its performance elsewhere weighed on its shares.

Prudential has been focusing on Asia, where consumers have been heavily under insured. The region contributes slightly under a third of Prudential's operating profit and a 24 percent rise in Asian new business profit in the first nine months came despite huge swings in Chinese stock markets.

"In Asia, we continue to target the huge opportunity offered by the growth of the middle class," Chief Executive Mike Wells told reporters, adding that the size of China's middle class now outstripped that of the United States.

Overall, new business profit rose 13 percent in the first nine months of 2015 to 1.76 billion pounds ($2.7 billion), slightly beating a consensus forecast compiled by the company.

But new business profit at Prudential's U.S. business, Jackson, fell 4 percent and Wells said it was still looking at "bolt-on" acquisitions in the United States.

M&G, Prudential's UK asset management business, had net outflows of 2.7 billion pounds in the third quarter as retail investors fretted about fixed income markets, Prudential said.

JP Morgan Cazenove analysts highlighted falling sales in Singapore, Malaysia and Indonesia, reiterating their neutral rating on the stock.

Prudential's shares fell 1.81 percent to 1,521 pence by 1001 GMT, underperforming a 0.37 percent fall in the FTSE 100 index.

Wells said the company was looking at internal and external candidates to replace UK and Europe Chief Executive Jackie Hunt. She resigned last month, less than five months after Wells, former boss of Prudential's U.S. business, became chief executive.

New business profit for the UK rose 16 percent to 231 million pounds, helped by British pension reform which has prompted interest in a greater variety of savings products.

(Additional reporting by Angus Berwick; editing by Sinead Cruise and David Clarke)