Prudential today confirmed it is taking a close look at AIG's Asian business and moved to reassure the City that it remains a source of financial strength.

The Pru's shares have been buffeted as concern grew that insurers could be the next to be dragged into the financial crisis.

Rumours that it was looking at the Asian arm which failed US insurer AIG has put up for sale also caused unease, with some analysts saying it does not have anything like enough capital to launch a bid for assets that could cost £8 billion.

Chief executive Mark Tucker did not elaborate today beyond saying: "You would expect us to look at every opportunity." He is understood to be seeking funds from governments in Asia and the Middle East, appointing Credit Suisse to lead the talks.

He hopes confirmation that Pru's capital position remains robust will calm nerves. The insurer has £1.2 billion of surplus capital, which should leave it in a healthy shape even if global equity markets tumble by another 40%, said Tucker.

"We've modelled against the great depression. On all scenarios we are in a very comforting position," he said.

The UK's number two insurer said sales were up 15% in the past three months to £2.3 billion. The fund management arm M&G is thriving, taking in £4 billion in the third quarter to the end of September.

Tucker admits that market conditions will "remain highly challenging for some time" but insists Pru's wide geographical base means it should do better than rivals.

The shares have tumbled from more than 800p last April, taking a particularly severe beating at the end of last week. Today they lost 12¼p to 318p as investors digested the sales numbers.

Pru recently decided against releasing funds from its so-called orphan estate money that has been built up over decades in its giant with-profits scheme.

This looks like an increasingly sensible move, say analysts.

Tucker believes he is duty bound to examine a bid for AIG's Asian arm, though it is not clear yet precisely what is for sale.

Some investors fear that the business is very difficult to price and worry that Pru may overextend itself.

The insurer's Asian business saw sales up 9% in the quarter to £1.03 billion. Today Pru cut its growth target for Asia, admitting it is unlikely to meet its goal of doubling 2005 profit levels by this year.

"Looking beyond these immediate events, Asia is the only region in the world that is expected to record high single-digit economic growth rates in both 2008 and 2009," said Tucker. "We remain highly positive about the medium to long-term prospects for Asia."

The US government had to launch a £48 billion rescue of AIG last month after it became clear it was close to collapse. It is best known in the UK for its sponsorship of Manchester United.