8th August 2018

Prudential delivers strong interim result

Prudential has reported interim financials-highlights are:
-Group IFRS operating profit of £2,405m, up 9%
-Asia new business profit of £1,122m, up 11%
-IFRS operating profit of £1,016m, up 14% and underlying free surplus generation of £590m, up 14%
-US variable annuity separate account assets up 10% from 30th June 2017 leading to a 13% increase) in fee income
-M&G asset management first half external net inflows of £3.5bn(£7.2bn), PruFund net inflows of £4.4bn(£4.3bn)
Planned demerger of M&G Prudential from the Group is progressing well
-Group Solvency II surplus estimated at £14.4bn; equivalent to a ratio of 209%(31st December 2017: £13.3bn, 202%
-2018 first interim dividend of 15.67 pence per share, up 8%.
Mike Wells, Group chief executive, comments “We have made a good start to 2018, delivering high-quality, profitable growth. At the same time, we are taking the steps needed for the demerger of M&G Prudential from the Group, which we announced in March, alongside implementing M&G Prudential’s merger and transformation programme, which remains on track to meet its objectives.
The Group’s performance has again been led by Asia, contributing to an overall increase in IFRS operating profit of 9%, growth in underlying free surplus generation of 6%, and an increase in new business profit of 13% despite a lower level of APE sales.
In Asia we have delivered double-digit growth across our key metrics of new business profit, up 11%, IFRS operating profit, up 14%, and underlying free surplus generation, also up 14%. Our growth continues to be high quality with protection new business profit growing by 19%, Eastspring, has increased IFRS operating profit by 13%. Our broad-based portfolio of life insurance and asset management businesses, high-quality products and multi-channel strategy ensure that we continue to benefit from the growing customer demand in Asia for the wealth and health products and services that we provide.
In our US life business, Jackson, variable annuity separate account assets were 10% higher than at 30th June 2017, leading to a rise in fee income as we continued to meet the need of Americans for retirement income. In the UK and Europe, continued demand for M&G Prudential’s differentiated product propositions has resulted in third-party net inflows of £3.5bn for our asset management business, M&G, and net inflows of £4.4bn in PruFund-related business.
Our planned demerger of M&G Prudential from the Group, which will result in two separately listed companies, each with its own distinct investment prospects, demonstrates our commitment to creating shareholder value. We have mobilised our internal teams for delivery, positively engaged with external stakeholders and we are making good progress.
Each of our businesses is built around strong and growing customer needs, and we continue to target growth in high-quality, recurring-premium health and protection and fee business. I am confident that, as we create new and better products, build our distribution channels and improve all our capabilities, we are well placed to continue to generate profitable growth for our shareholders.”

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