Oct. 26 (Bloomberg) -- Prudential Plc, Britain's No. 2 insurer, may expand beyond its focus on life insurance while keeping Internet bank Egg Plc, under new plans laid out by Chief Executive Mark Tucker. The stock fell as some investors said the strategy echoed plans of his predecessor, who was ousted this year.

``We see a need, looking to the future, to target a broader spectrum of opportunity than just life insurance -- important and profitable though we expect that sector to be for us,'' Tucker said today in a statement. Prudential has also decided to ``retain and develop'' its 79 percent stake in Egg, the company said.

New life and pensions business rose 16 percent to 481 million pounds ($858 million), from 413 million pounds a year earlier, Prudential said. U.K. sales were unchanged at 156 million pounds amid ``intensified'' competition for mortgage protection and individual annuity products in the quarter.

Tucker, 47, unveiling his plans for the first time since taking the helm in May from Jonathan Bloomer, will work more closely with Egg under a ``broader'' U.K. strategy. Some investors said the plan to focus more on Britain, amid stiff competition, resembled a strategy that led investors to force out Bloomer.

Shares of Prudential fell 10.5 pence, or 2.2 percent, to 475 pence at 11:43 a.m. in London. The stock has gained 7.2 percent this year through yesterday's close, ranking it fifth on the eight- member FTSE All-Share life insurance index.

Prudential had been trying to sell the Egg stake last year under Bloomer, who was ousted as CEO by investors who protested a surprise 1 billion pound share sale to fund the U.K. business after the insurer previously focused on Asia for growth.

Prudential today said it will continue to focus on its Asian business by seeking ``organic growth,'' particularly in China, Taiwan, Korea and India. The Asia business will begin to generate cash in 2006 and doesn't need further investment from the parent company, said Tucker.

Egg, the U.K.'s biggest Internet bank, posted third-quarter net income of 11.2 million pounds today, compared with a 71.8 million loss in the period last year, as costs linked to the closure of its unprofitable French business weren't repeated.

The bank has a ``young and affluent'' client base with 3 million customers, Tucker said on a conference call. Its direct distribution business model will also help Prudential profit from the personal savings and loans market, he added.

``The potential advantages that we can get from owning Egg make it clear that retaining it is the right decision,'' the company said today.

Prudential hasn't decided whether to combine Egg with its main businesses and hasn't yet calculated the cost of taking full control of the company through a share exchange, Tucker said. In August 2004, Prudential abandoned a seven-month search for a buyer for Egg, which had a net loss of 91.4 million pounds last year because of costs linked to shutting down the French business.

A change in interest rate assumptions affecting guarantees to policyholders in Taiwan may affect so-called embedded value, which measures a company's worth, by as much as 700 million pounds, said Finance Director Philip Broadley in a conference call with analysts. Profitability probably won't be undermined, he said.

New business in the U.S. gained 17 percent to 125 million pounds. The region will be an ``engine for growth'' and has sufficient scale to compete, the company said.

Competition in the U.K., which restricted revenue growth, ``seems to be lessening,'' and sales will rise 10 percent in 2005, Tucker said.

Prudential's third-quarter worldwide sales figures beat the 478 million-pound median estimate of five analysts surveyed by Bloomberg by 3 million pounds.

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