Prudential, the UK insurer, today confirmed it was examining whether to buy Asia-based assets from AIG, its stricken American rival, and confirmed that financial turmoil in the region had forced it to delay its new business profit targets.

The company said it was “monitoring closely” AIG’s disposal programme and considering what opportunities may arise for it to boost its business in Asia, where it said it remains “highly positive” on its long-term prospects despite extreme global volatility.

It is understood that Prudential has approached several sovereign wealth funds to help bankroll a bid for certain of AIG's operations, which are being sold after the US Government was forced to bail-out the insurer with a $85 billion (£49 billion emergency loan.

However, Mark Tucker, chief executive of Prudential, today declined to comment on whether the company was speaking to strategic investors or if the group was considering raise capital to bid for assets.

Prudential said today that it had a capital surplus of £1.2 billion, down from £1.4 billion three months earlier, which it said was sufficient to remain resilient to a significant further deterioration in both market and economic conditions.

Mr Tucker said it would be wrong not to look at AIG but that the process was only a few weeks old and that further clarity was needed from all parties involved, including the US Government, before any update could be given.

Prudential also said today that it was unlikely to achieve its goal of doubling 2005 new business profits a year early in 2008, although it expects to achieve this in 2009, assuming a return to more normal market conditions.

Management said weaker consumer confidence in the region had dampened enthusiasm for taking out insurance.

Prudential said the group’s capital position was resilient to extreme stresses from key financial risks, such as falling equity markets which it admitted could decline by a further 40 per cent. Although, the company said that the impact of falling equities would be limited to £250 million due to its hedging policy.

Overall, new business in the three months to September 30 rose 15 per cent to £2.3 billion.

However, Prudential recorded credit losses of £293 million during the period, including a £107 million hit on investments connected to Lehman Brothers and £86 million connected to Washington Mutual.

It also recorded losses against General Motors and Fannie Mae and Freddie Mac.

Looking ahead the company said it fully expected global financial market conditions to remain “highly challenging for some time,” sending its shares down 1.89 per cent to 3.24p.

But Prudential said that its retirement-led strategy, geographic spread and brand meant it was well positioned to outperform its peers.

Richard Hunter, an analyst at Hargreaves Lansdown, said the update had removed concerns on many of the fronts which had recently been plaguing the shares.

“The company has reiterated its robust capital position, confirmed its interest in potentially cherry-picking some of the available AIG business and, in the meantime, posted an impressive 15 per cent increase in sales,” he said. “Given the difficult backdrop, the performance in the UK and the US has also remained perfectly adequate.”

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive