Fitch expects the exposure to ease once the arm merges with sister company Acenda Life, which runs a lower-risk portfolio, with the merger creating Australia's fourth-largest life insurer.
The disposal is scheduled for Thursday and leaves Prudential Corporation Holdings with 32.6% of the Indian fund manager, with its governance rights unchanged.
Reinsurance is playing a wider role in capital management across Asia, but executives warn insurers must get product economics and asset backing right first.
