Prudential planning to branch out to Brazil

Prudential may be planning to branch out to Brazil as the British insurance firm, with a strong Asia and US presence, taps into South America under its expansion plan.

Prudential chief executive Tidjane Thiam is said to be in talks with the Brazilian government to allow a loosening of the local legislation which does not allow an insurance company to control its own sales force.

Under the present law a move to Brazil would require Prudential to partner with a bank and use the bank's sales channel to sell insurance services and products, which hurt the insurer's profits and corporate control.

However, an announcement of a Latin American expansion is not likely to come any time soon as the global insurer tries to focus efforts against the threat of new European rules known as Solvency II.

Two weeks ago it emerged that Prudential was considering a move to Hong Kong to avoid the new controls, which could end up with Prudential losing out against American rivals if its US division was subject to the tighter European regulations on insurers.

However, the company's full year results announcement tomorrow is not likely to include plans of a Brazilian branch – or an expansion in Cambodia, which is also on said to be on the cards.