Prudential plc announced FY 2021 results

Performance highlights for the continuing business on a constant (and actual) exchange rate basis

• APE sales up 8 per cent (10 per cent) to $4,194 million

• New business profit up by 13 per cent (15 per cent) to $2,526 million

• Strategic positioning to Asia and Africa completed

• Adjusted operating profit from continuing operations up 16 per cent (17 per cent) to $3,233 million

• Second interim ordinary dividend of 11.86 cents per share, 17.23 cents per share for the full year

Quote from Mike Wells, Prudential plc’s Group Chief Executive

 “Prudential has delivered high-quality, resilient growth as we completed the strategic re-positioning of our business to focus solely on Asia and Africa. We have continued to deliver for our customers against the backdrop of the Covid-19 pandemic, and I would like to record my deep gratitude to our staff and agents for their outstanding efforts. We have announced that I will retire from my role at the end of March 2022. I am grateful to have had the opportunity to work with the staff and Board of Prudential, and look forward to watching the Group’s further success.

“Our digitally enabled, multi-channel and geographically diversified business enabled us to increase APE sales by 8 per cent and deliver growth in 10 of our 14 insurance markets, despite the obvious challenges of Covid-19. New business levels in Hong Kong remained impacted by the continuing Mainland China border closure. Excluding Hong Kong, 2021 APE sales grew by 16 per cent driven by our businesses in Mainland China, India, Malaysia, the Philippines, Singapore and Thailand. We delivered 13 per cent growth in Group new business profit through an improvement in business mix, and therefore margin, and the growth in new sales.

“We have completed the strategic re-positioning of our business into one focused entirely on Asia and Africa. In the fourth quarter, we carried out a successful $2.4 billion equity raise in Hong Kong. In December 2021 and January 2022 cash from this issuance was deployed in deleveraging our balance sheet in a $2.25 billion debt reduction programme. These actions, together with the associated reduction in interest costs, have enhanced our financial flexibility in light of the breadth of opportunities to invest for growth in Asia and Africa.”

Prudential Malaysia Highlights

Continued momentum supported by strong market positions

• APE sales reached a record high of $461m, up 31 per cent

• Takaful APE sales hit $100m, up by of 61 per cent. We remain the largest player with 30 per cent market share.

• New business profit was 9 per cent higher, driven by growth in health and protection business

• IFRS operating profit up 12 per cent to $350m

• Quality of agents continues to improve, with MDRT qualifiers increased 48 per cent to over 1,200 agents

Quote from Lim Eng Seong (pic above), Chief Executive Officer of Prudential Assurance Malaysia Berhad (PAMB)

“The diversity of our distribution and our focus on strengthening its capabilities have been instrumental in delivering our ambitious growth targets. We registered a strong new business APE growth with contribution from our Takaful and bancassurance channels. In the Takaful segment, we maintained our number one position with 30 per cent market share. At the same time, the productivity of our overall agency force improved by 45 per cent, where our MDRT segment grew 48 per cent to record more than 1,200 MDRT agents in 2021. Our bancassurance channel also grew by 33 per cent as we shifted to higher protection and longer-term product sales.

“Against a tough backdrop of the ongoing COVID challenges, our customer retention remained high at more than 90 per cent with a total of 2.7 million customers. Having been in Malaysia for close to 100 years, we are equally committed to support Malaysians during this challenging period. We paid out circa RM21 million of Covid-19 claims to our customers, and to the low-income communities through our PRUKasih programme.

“Leveraging our Pulse platform, we will be able to make healthcare and financial security more accessible and affordable, as we reach out to more people including the underserved communities. We will accelerate our growth by seizing the opportunities that arise as the local and global economies recover, balancing profitability and sustainability.”

Notes

1. Continuing operations represents the Asia, Africa and head office functions of the Group following the demerger of Jackson.

2. Further information on actual and constant exchange rate bases is set out in note A1 of the IFRS financial statements.

3. APE sales is a measure of new business activity that comprises the aggregate of annualised regular premiums and one-tenth of single premiums on new business written during the year for all insurance products, including premiums for contracts designated as investment contracts under IFRS 4. It is not representative of premium income recorded in the IFRS financial statements. See note II of the Additional unaudited financial information for further explanation.

4. New business profit, on a post-tax basis, on business sold in the period, calculated in accordance with EEV Principles.

5. In this press release ‘adjusted operating profit’ refers to adjusted IFRS operating profit based on longer-term investment returns from continuing operations. This alternative performance measure is reconciled to IFRS profit for the period in note B1.1 of the IFRS financial statements.

6. On a constant exchange rate basis.

7. 13 Asia markets plus Africa.

8. After deduction of underwriting fees and other estimated expenses connected with the equity raise.

Please refer to this link for the full report.

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