Prudential seeks larger slice of life in China as Asia drives profit

* New-business profit jumps 17 pct to 2.47 bln stg

* Asia new-business profit jumps 15 pct to 1.61 bln stg

* Seven Asian countries show double-digit growth

* Shares up 1.1 pct vs FTSE 100 up 0.12 pct

* Share performance vs peers: http://bit.ly/2zJnEdz (Adds quotes, context, updates shares)

By Noor Zainab Hussain, Carolyn Cohn and Simon Jessop

Nov 16 (Reuters) - Prudential expects its Asian business to double in size every five to seven years, the British life insurer said after reporting the region drove a 17 percent rise in new business profit during the first nine months of 2017.

Britain's largest insurer, which traditionally saw its revenue fairly equally split between Asia, the United States and Britain, has pushed ahead with Asian growth in recent years.

Asia was "in some ways, ours to lose", Chief Executive Mike Wells told investors on Thursday after Prudential said that new business profit in the region rose 15 percent to 1.61 billion pounds, helped by higher sales and rising interest rates.

Group new business profit of 2.47 billion pounds ($3.25 billion) was driven by higher sales and favourable economics, Prudential said in a statement published ahead of an investor day.

Panmure Gordon analyst Barrie Cornes flagged Prudential as a 'buy' in a note to clients and its shares were up 1.1 percent at 1406 GMT, outperforming the FTSE 100 index.

Seven countries clocked double-digit growth in Asia, including Hong Kong, Singapore and China, which said last week it would ease foreign ownership curbs in the financial sector, with the limit on insurance companies due to be raised to 51 percent after three years, and fully removed after five.

Asia Chief Executive Nic Nicandrou said Prudential would like to have a bigger share of its life insurance business in China, where it has a 50:50 joint venture with CITIC Group.

"I see no reason why China can't be bigger than Hong Kong," he said, adding that Pru's existing presence gave it an advantage even as China opens up to other foreign players.

"The biggest opportunity for us is growing into that footprint," he said.

Market gains helped Eastspring, the firm's Asian asset management business, deliver year-to-date external net inflows of 2.8 billion pounds, and Prudential said it was also looking to China to help drive future growth.

Guy Strapp, chief executive of Eastspring Investments, told investors the unit was in the process of setting up a wholly-owned unit in China to manage non-retail funds, to add to a joint venture with CITIC that manages retail funds.

Strapp said Eastspring was recruiting to establish an onshore investment team in China, the world's second-biggest economy and which is expected to account for 49 percent of Asia's total fund under management by 2020.

The plans to expand in China come as Prudential and rivals such as AXA back out of some markets, including Vietnam where the British firm is selling consumer finance to focus on insurance.

NO DECISION ON LEGACY BOOK

While analysts were hoping for an update on a mooted sale of Prudential's legacy book of UK annuity business, Wells said no decision had yet been reached, but should the insurer sell some or all of it, excess capital would be returned to shareholders.

Prudential is shifting its focus away from traditional life insurance products with hefty capital charges such as annuities, which pay a fixed income for life. It merged its UK fund and life insurance businesses earlier this year.

It is planning to sell a 10 billion pound book of closed annuity business in the first instance, according to media reports, but the shift would be slow, John Foley, chief executive of the UK business, said.

"Getting to capital-light, capital-efficient might take a little while," Foley added. ($1 = 0.7593 pounds)

(Additional reporting by Sumeet Chatterjee; editing by Gopakumar Warrier/Amrutha Gayathri/Alexander Smith)