Seeing Big Profits in Asia's Middle-Class Boom
Prudential PLC is riding the wave of demographic change occurring in emerging Asia, CEO Tidjane Thiam told CNBC's "Closing Bell" on Friday.
Unique among European life insurers, Prudential is based in London but has little exposure to continental Europe and instead is focused on selling protection and health insurance products to the burgeoning middle class across emerging Asia.
"There are more and more Asians and the middle class is not correlated to the short-term economic fluctuations," the Prudential CEO said. "It's a huge transformation that's underway with hundreds of millions of Asians entering the middle class every year."
(Read More: 8 Ways to Invest in Aging Asia.)
This trend should last decades, Thiam noted, given that many Asians do not yet have a life-insurance policy and there's a limited social safety net in many countries.
"We're in virgin territory," he said, noting that penetration in Indonesia is less than 1 percent, and only 0.7 percent in Vietnam. Prudential grew over 30 percent in Indonesia in the third quarter, Thiam added.
In addition to having little business in Europe outside the U.K., Prudential's $600 billion investment portfolio is also underweight Europe.
"We're a very long-term investor as an insurance company, so the long-term characteristics of the economies are very important," Thiam said. "We believe euro-zone economies are in structural decline and deficits."
This strategy has paid off for shareholders, with the stock up over 40 percent year-to-date.
"The market believes what we're doing is very profitable and not that risky," Thiam said.