Prudential: full of eastern promise For a century, Prudential has been a household name in the UK. But 10,000 miles away, it is becoming one too. Its 2011 earnings - 7 per cent higher than a year earlier - confirmed that Asia is now the insurer's biggest market, making up a third of its £2bn operating profit. Even better, operating profit at its Asia business grew by one-third last year to £700m. That outpaced AIA, the life assurance group Prudential failed to convince investors it should buy in 2010. This is because Prudential is exposed to the region's fastest growing economies. Indonesia is the Pru's biggest Asian market, producing more revenues than its entire Asian business did just four years ago. Its 100,000 local agents helped boost sales of life insurance premiums there by 28 per cent, while margins on new business expanded by a sixth to 87 per cent, almost two and a half times those in the UK. Indonesia's potential is vast. As the fourth most populous country in the world with only about 1 per cent penetration of life insurance, earnings could grow by an average 25 per cent a year until 2015, Barclays estimates. And Prudential is funding its Asian expansion through the cash it is generating there - £472m last year, just a third less than the cash it made in the UK. Yet Prudential is priced at a 40 per cent discount to AIA at 0.9 times 2012 embedded value (net assets plus the current value of future profits from existing policies). Are investors overlooking Prudential's Asian future? It looks like it. Surely they cannot be waiting for Tidjane Thiam, chief executive, to unlock that value by spinning off Asia? For one, the UK business's reliable earnings and £6bn in capital help keep its credit rating at double A. (The importance of its UK business also means its threat to domicile elsewhere to avoid Solvency II might remain remote for now.) Investors may be ignoring the Pru. You can bet rivals aren't.