No 2 British insurer Prudential reported an 8% rise in profits to $2.3 billion, demonstrating that a flat UK market and a tough US market are being offset by the company’s strategy to expand rapidly into Asia.

Total insurance sales in Asia during 2000 have risen 75% to $1.4 billion. Prudential has now bought into the potent life insurance markets of India and China, and in January bought ailing Orico Life in Japan.

Legal & General, the No 3 company in the British market, confounded the pundits with a 15% rise in profits to $1.3 billion.

The growth strategy of L&G – basically a life company with some general insurance attached – contrasts with the other two market leaders’ focus on foreign markets. L&G has a purely domestic focus.

It has made L&G unpopular with some big investors, who believe an international presence allows diversified multi-market exposures. But L&G’s better-than-expected profit in a sluggish market showed that its alliance deals with major British banking groups are beginning to show results.