Prudential's cquisition of Thailand's Thanachart Life Assurance, a subsidiary of Thanachart Bank, marks a crucial step in the British insurer's expansion in Southeast Asia — a region Group Chief Executive Tidjane Thiam refers to as the company's "sweet spot".
"Thailand, with 65 million people, its growing GDP, industrial base and middle class was one place where our absence was glaringly obvious. We were a very small player, number 11 in the market and that's not the place we like to have," Thiam told CNBC's "The Call" on Monday.
Before the deal,
Prudential and Thanachart Bank have a 15-year partnership, under the deal, to jointly develop their bancassurance business in Thailand.
Bancassurance is a partnership between a bank and an insurance company which allows the insurance company to sell its products to the bank's client base.
"The 15-year exclusive long-term distribution deal really puts us in a good position in the Thai market. That is very important for Prudential," Thiam added.
Prudential is not the only insurer looking to expand its presence in a region that boasts favorable demographics and growing wealth. Last month, rival AIA Group announced its plans to buy ING's Malaysian insurance unit for $1.73 billion.
Thiam, however, denied that AIA's acquisition prompted Prudential to pursue the deal.
"We can work fast, but not that fast. Good things take a long time to come and clearly if we were able to announce on November 5 the birth of this baby, means that it's been conceived a while ago and certainly before all the recent news came out," he said.
Discussing Prudential's strategy for North Asia, Thiam said, while the company is active in Taiwan and South Korea, the markets do not possess the same favorable characteristics present in Southeast Asia.
"A large growing and young population is very good in our business," he said.
In September, the U.K. insurer announced plans to sell its 7.7 percent stake in Taiwan's China Life Insurance for $160 million.
While Asia is the largest contributor to Prudential's operating profit, the relocation of the company's headquarters from London to Asia will be determined by the outcome of the European Union's proposed Solvency II - stricter capital rules for insurers due to be implemented in 2014.
Thiam earlier this year told the U.K's Telegraph newspaper that the insurer would consider switching its headquarters to Hong Kong unless the Solvency II proposals were watered down.