* Fund arm M&G has client base in Europe, Brexit could hurt
* 2015 operating profit up 22 pct to 4 bln stg
* UK life profit rises 60 pct
* China middle class seeking insurance
* Company pays first special dividend since 1970 (Releads with Brexit comments, updates shares)
By Carolyn Cohn
LONDON, March 9 (Reuters) - Prudential renewed calls for Britain to remain in the European Union on Wednesday, warning that an exit could make it harder for its UK fund management arm M&G to attract investors.
"M&G's structure and distribution and client base are in Europe. It's in our interest for the UK to remain," the insurer's chief executive Mike Wells said.
With less than four months to go before a referendum on whether Britain should stay in the EU or leave the bloc, industry leaders are increasingly making their views known.
Bank of England Governor Mark Carney said on Tuesday a Brexit vote could hit the UK's $2.9 trillion economy and prompt some banks to leave London's financial powerhouse.
Prudential's UK life insurance and asset management business makes up nearly a third of its operating profit and Wells was among 36 FTSE 100 bosses who signed an open letter last month also saying Brexit would put the UK economy at risk.
Wells made his call as Prudential reported its group pre-tax operating profit for 2015 rose 22 percent to 4 billion pounds ($5.7 bln), above analysts' consensus forecast for 3.8 billion pounds, according to Thomson Reuters data.
The insurer also announced its first special dividend since 1970 as operating profit at its British life business jumped 60 percent to 1.2 billion pounds, helped by reinsuring more of its longevity risk and adjusting its fixed income portfolio.
Prudential's shares were up 3.4 percent by 1106 GMT, the top performer in Britain's FTSE 100 index.
Funds under management at M&G, Prudential's UK fund management arm, fell 7 percent to 246 billion pounds, driven by outflows from retail investors in a volatile year for markets.
But operating profit at the firm's business in Asia, where it is looking for growth, rose 17 percent and asset management arm Eastspring posted record third-party net inflows.
Wells said an economic slowdown in China was not impacting business, as a more cautious outlook was encouraging China's rising middle class to buy more insurance products.
Prudential, which was the first British insurer to announce a solvency capital ratio under new European rules, said its ratio at the end of 2015 was 193 percent, up from 190 percent at the end of June.
A ratio of 100 percent shows insurers have sufficient capital to cover underwriting, investment and operational risks.
The firm, which is listed in Asia as well as London, said it would pay a total dividend of 38.78 pence per share, up 5 percent from 2014 though below a forecast of 39.69 pence. It said it would also pay a special dividend of 10 pence per share.
$1 = 0.7048 pounds Editing by Susan Fenton and Alexander Smith