LONDON, UK: In the bustling financial landscape of 2024, Prudential PLC emerged with a robust Q1 performance, marked by an 11% surge in new business profit, reaching a striking $810 million, albeit excluding economic impacts.
This growth was a testament to the company’s diverse geographical market presence. However, when economic impacts were factored in, the new business profit remained steady at $726 million.
The quarter witnessed a 7% increase in APE sales, amounting to $1,625 million. Despite facing strong comparators in Hong Kong and CPL, along with headwinds in Vietnam, Prudential PLC maintained its momentum.
Hong Kong’s Market Dynamics: In Hong Kong, Prudential PLC’s strategy centered on quality growth. Following a significant rebound in Q1 2023, the company still managed a 1% growth in total APE sales, with both domestic and Chinese Mainland visitor segments expanding. The agency and bancassurance APE sales held steady, echoing the latter half of 2023’s performance. The Chinese Mainland visitor segment saw stable average case sizes, albeit smaller than in Q1 2023. The new business margins rose from 64% to 69%, bolstered by a 16% hike in health and protection APE sales, which in turn propelled the new business profit growth beyond the APE sales increase.
CPL’s Resilience: CITIC Prudential Life (CPL), Prudential’s joint venture in the Chinese Mainland, experienced a 17% dip in APE sales year-on-year. Yet, the first quarter of 2024 surpassed the total sales of the last six months of 2023 for both agency and bancassurance channels. The company’s shift towards long-term savings, annuities, and health and protection, coupled with a focus on quality and product optimization, led to a 4 percentage point increase in new business margins, excluding updated economics.
Singapore’s Steady Climb: Singapore continued its upward trajectory from the second half of 2023, marking a third consecutive quarter of APE sales growth. The APE sales rose by 2%, and new business margins improved by 2 percentage points, excluding economic impacts, resulting in an uptick in new business profit.
Malaysia’s Remarkable Performance: Malaysia’s APE growth stood out with a 29% increase from the previous year, driven by a 50% surge in bancassurance sales, thanks to robust bank partnerships, especially with UOB, and new product launches. The health and protection APE sales also saw an upward trend. However, the higher proportion of bancassurance sales led to a slight decline in margins.
Indonesia’s Mixed Results: Indonesia faced a 10% decrease in APE sales due to regulatory changes affecting investment-linked products. Nevertheless, bancassurance sales soared by 26%, fueled by UOB’s expanded customer base post-Citi Bank integration. Despite lower APE sales and channel mix effects, Prudential PLC is committed to its transformation program aimed at enhancing productivity and profitability.
Growth Markets’ Surge: The “growth markets and other” segment, encompassing Thailand, Taiwan, India, and Africa, saw a robust 28% increase in APE sales, compensating for Vietnam’s ongoing challenges. Although new business margins dipped due to business mix effects, the substantial APE sales growth ensured an overall rise in new business profit.
Eastspring’s Expansion: Eastspring’s funds under management or advice swelled to $239 billion by March 2024, up from $237 billion at 2023’s end. This growth was fueled by strong net inflows from Prudential’s insurance business and $0.1 billion of net inflows from third parties, with the retail business experiencing robust inflows, balancing out the institutional business’s outflows.
As the first quarter of 2024 concluded, Prudential PLC stood poised, reflecting resilience and adaptability amidst a dynamic economic environment, ready to navigate the future with strategic finesse and a commitment to sustainable growth.
CEO Anil Wadhwani, said: “Against a strong prior period comparator that reflects our outperformance in Q1 2023 when the border between Hong Kong and the Chinese Mainland reopened, I am pleased the Group has delivered new business profit growth of 11 per cent, excluding economic impacts. Our continued focus on the quality of business written is reflected in new business profit (excluding economic impacts) growing more than APE sales.
Our total APE sales have grown sequentially each quarter since Q3 2023, reflecting resilient consumer demand across Asia and demonstrating the strength of our multi-market and multi-channel distribution model. Together, we believe this provides a sound base for continued FY 2024 new business growth. Given the relentless execution focus in implementing our strategy, we are increasingly confident in achieving our 2027 financial and strategic objectives. We remain focused on accelerating value creation for our shareholders and we expect to provide an update on our capital management plans by HY 2024 results.”
