Asia:Prudential reports 1H new business profit of nearly US1.5bn

Prudential plc has announced that its new business profit amounted to at $1,468m for the first half of 2024. This was up by 8% (6% on actual exchange rate basis) excluding the effect of interest rate and other economic impacts and up 1% (down by 1%) after allowing for these impacts.

Prudential says that this reflected higher volumes in Taiwan and Singapore and Hong Kong domestic business partly offset by adverse channel and country mix effects.

In addition, its performance in the first half of 2024 was achieved having taken steps to reposition its business in the Chinese mainland ahead of both regulatory and macro-economic changes.

By market segment

Other 1H performance highlights on a constant (and actual) exchange rate basis include:

• Adjusted operating profit up by 9% (6%) to $1,544m

• APE sales increased by 6% to $3,111m

• First interim dividend of 6.84 cents per share (2023: 6.26 cents per share on an AER basis), up by 9%

• Free surplus ratio of 232% (31 December 2023: 242%) and a GWS shareholder capital surplus over GPCR of $15.2bn, equivalent to a cover ratio of 282% (31 December 2023: 295 %).

Commenting on the results, CEO Anil Wadhwani, said, "We entered this year with a clear strategy and a set of outcomes we are confident in achieving by 2027, namely a compounded annual growth rate for new business profit of 15 to 20% and double-digit for cash generation, both measured from a 2022 base.

“In the first half of 2024, we delivered high-quality new business profit growth of 8% alongside increased margins, on an ex-economics basis, and adjusted operating profit up 9%. This followed exceptional growth of 47% (excluding economic impacts) in new business profit for the full year 2023, resulting from the strong rebound in Hong Kong after the removal of COVID restrictions and the opening of the border with the Chinese mainland.

“We announced a $2bn share buyback programme, to return capital to shareholders while we continue to invest in growth opportunities.”

Business

Apart from re-positioning its business in the Chinese mainland, the insurer also took decisive action on medical repricing in Indonesia and Malaysia in advance of the market.

Other markets such as Singapore, India, and Taiwan performed well given the company’s continued product innovation and expansion of distribution capabilities.

In distribution, while agency new business profit was lower in the first half of 2024 given the high base effects in the 2023 comparative period in many markets, Prudential says that it is intensifying its efforts on the underlying drivers of agency growth with a focus on quality recruitment, training and embedding PRUForce, its digital agency platform.

Bancassurance performed strongly with 28% growth in new business profit in the first half of 2024, excluding the effect of interest-rate and other economic impacts, with Hong Kong, Malaysia, Singapore, Taiwan, and Thailand being notable markets.

Outlook

Prudential also said, “ We have seen a pick up in sales momentum in June, which continues into the second half of the year. In respect of 2024, new business profits are expected to grow at an annual rate consistent with that required to meet our 2022-2027 new business profit growth objective. The structural drivers of growth in Asia and Africa for the insurance industry remain intact, with ongoing strong demand in respect of protection, long-term savings and retirement propositions as broader-based economic growth returns to our markets. We continue to be confident in achieving our 2027 financial and strategic objectives.”