If you’re looking to play the expected reopening for China and its economy in 2023, FTSE 100 insurer and asset manager Prudential (PRU) could a good way to get exposure while also benefiting from the transparency of investing in a UK-listed company.

Following the demerger of M&G (MNG) in the UK in 2019 and the sale of its Jackson Life annuity business in the US last year, Prudential is now exclusively focused on Asia and Africa.

The company provides life and health insurance as well as asset management services where it has just over 19 million life insurance customers and a potential market of five billion individuals.

According to Swiss Re, 80% of the Asian population has no insurance and 39% of health and protection spend is paid out of pocket. Prudential therefore has an opportunity to be a major player as growing middle class wealth drives improved take-up in insurance and protection.

Prudential forecasts an increase of $900 billion in gross written premiums for the life insurance industry over the next decade and sees its own premiums more than doubling from $29 billion last year to more than $60 billion by 2032.

It is already a top-three provider in 11 of 13 Asian markets, including market-leading positions in Malaysia and the Philippines. It has a 15% market share in India’s life insurance market and is growing fast in Thailand, which it calls a ‘high potential’ market.

In China, Prudential has 23 branches and a presence in 99 cities, meaning it has access to nearly the whole of the country. The pandemic will have reinforced the need for the health and protection provision.

Asia is forecast to contribute around 40% of global GDP growth over the next five years, with the middle class expected to top 1.5 billion people by 2030, yet according to research by Swiss Re there is a $1.8 trillion ‘health protection gap’. Given Prudential’s current market valuation, very little of this potential growth seems to be priced in.

Instead, the shares seem to be in limbo reflecting the extended transition period between the departure earlier this year of previous chief executive Nic Nicandrou and the arrival of new chief executive Anil Wadhwani in February next year. That provides an opportunity to buy the shares cheaply before the spotlight returns to the business.

Investors are waiting to hear what Wadhwani, who until recently ran Canadian insurer Manulife’s Asian business, has to say about Prudential when he joins and the direction in which he thinks it should be going.

The current Covid restrictions in China have not helped sentiment towards the company either, but there are clear signs of a rethink by the government and by early next year the economy could be reopened which would lead to an upsurge in business.

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