Prudential life insurance posts double-digit profit rise

Over the first nine months of 2018, the Prudential Group’s life insurance business saw profit increase by 17 per cent (12 per cent on an actual exchange rate basis), which it said reflected the strength and diversity of the group’s positioning.

The group also attributed the performance to pricing actions and more favourable economics in the period.

In Asia, the Pru’s performance continues to be driven by a strategic focus on recurring premium, health and protection business.

In the first nine months, new business profit increased by 15 per cent (9 per cent on an actual exchange rate basis) to £1,762 million, with a 19 per cent increase in health and protection new business profit.

This performance remains broad-based, with double-digit growth in seven markets, and across both agency and bancassurance channels.

While APE sales in the first nine months were unchanged compared to the same period in 2017, the year-on-year growth rate was 9 per cent in the discrete third quarter and included record third quarter sales in seven markets.

In asset management, Eastspring total funds under management increased to £149.2 billion (31 December 2017: £138.9 billion), reflecting continued internal net flows from life businesses and the additional funds from the acquisition of TMB Asset Management in Thailand.

External net outflows were £2.0 billion in the year to date, resulting from institutional bond fund redemptions and the impact of market volatility on retail gross flows.

On 23 October 2018, Eastspring announced it had successfully registered Eastspring Investment Management (Shanghai) Company Limited, Eastspring’s wholly foreign owned enterprise, as a private fund manager with the Asset Management Association of China, providing a foundation for long-term development of the business in China.

Chief executive Mike Wells said that since 2014, the Asia business is “demonstrating our ability to capture high-quality growth at pace”.

He added: “The profitable growth prospects of our Asia businesses remain substantial, given the increasing protection and savings needs of our customers and the extent of the footprint we have established.”

In the US, Jackson’s new business profit increased 22 per cent (16 per cent on an actual exchange rate basis) to £716 million in the first nine months, primarily reflecting the benefit of higher interest rates and tax reform.

Variable annuity APE sales, excluding Elite Access, were up 1 per cent compared with the same period last year. Separate account assets are up 5 per cent year-to-date to $185.3 billion (31 December 2017: $176.6 billion), driven by positive net flows and favourable market movements.

M&G Prudential has seen continued demand for PruFund-backed products, leading to an 18 per cent increase in new business profit to £277 million, with APE sales up 6 per cent.

PruFund net inflows of £6.6 billion in the first nine months contributed to PruFund funds under management of £42.9 billion, 19 per cent higher than at the start of the year.

In asset management, external net outflows of £5.6 billion in the first nine months (2017: net inflows £9.9 billion) included outflows of £6.1 billion from the redemption of a single large, but low-margin, institutional mandate.

External funds under management were £157.4 billion at 30 September 2018 (31 December 2017: £163.9 billion), with M&G Prudential total funds under management of £334.4 billion (31 December 2017: £350.7 billion).