INSURER Prudential is to undergo a restructuring that will allow it to separate its Asian business from its UK operations.

The news was revealed as it announced a 22% rise in first-half operating profits led by Asia while domestic earnings faltered.

In October, former Standard Life finance director Jackie Hunt will join Prudential, which has a large operation in Stirling, to run its UK life assurance arm which has seen sales plunge.

Prudential chief executive Tidjane Thiam said yesterday: "In the first half of the year, our strategy has continued to work, delivering both profitable growth and cash."

Operating profit of £1.4 billion for the six months to the end of June was up 22% on the same period last year and better than the City had expected.

On a new business profit basis, Prudential's preferred measurement, earnings rose 11% to nearly £1.3bn, of which more than half came from its Asian operations.

In Asia, Prudential saw 20% growth in its new business profit, thanks to double-digit sales  increases in eight markets, including a 42% leap in mainland China and a 21% increase in Hong Kong.

In contrast, in the UK, new business profit fell 14.5% to £130m from £152m, although the figures were distorted by a large bulk annuity transfer last year.

Retail new business profit was in line with the first half of 2012, Prudential said. Its operating profit of £341m was up 1 %.

Prudential saw overall sales fall 14% in the UK, with retail sales off 8% as demand for products such as with-profits bonds plunged following the introduction of new rules banning providers from paying commission to financial advisers.

Mr Thiam noted a large fall in the number of independent and bank-based financial advisers since the introduction of new rules raising qualification standards.

"We cannot defy gravity," he said. "Going forward, it is frankly very difficult to forecast what is going to happen."

He said the group would continue to focus on with-profits policies and annuities.

It will be the task of Ms Hunt to turn the business around after she succeeds Rob Devey as chief executive of Prudential's UK and Europe arm at the end of October.

The business has 3000 employees, of whom 2200 work at its Cragforth office near Stirling.

Mr Thiam is determined to focus Prudential on the growing middle classes of Asia, even though his early months in the role were marred by Prudential's failure to buy AIG's Asian arm AIA in 2010.

He said there is a "misunderstanding" about changes in the world economy with misplaced concern about slowing growth in China.

Prudential predicts Asian growth will create the equivalent of six German economies in the next two decades and swell the ranks of the middle classes.

Prudential is creating a new company for its Hong Kong arm, which is currently a branch of the UK group.

It will then reorganise its Asia businesses under a single new entity chaired by Mr Thiam.

Mr Thiam noted this would allow Prudential to split the business from its UK core more easily.

"It is a consequence of that," he said. "It is also good management. Ultimately this will bring all our Asian geographies under one umbrella company and give us a simpler, more effective corporate structure."

There has long been speculation that managers at Prudential are considering a sale of its UK arm to focus on the lucrative opportunities in Asia.

Its fund management arm M&G delivered a record operating profit of £204m, up 17%, after taking net retail inflows of £4.8bn. Prudentials' US business Jackson remitted £294m of cash.

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: "As global demographic changes continue to play into its hands, Prudential remains strongly placed."

The group announced an interim dividend of 9.73p, up 15.8%, to be paid on September 26.

Prudential's shares closed up 48p or 4% at 1232p.