a5646m
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the
month of April, 2024
PRUDENTIAL PUBLIC LIMITED COMPANY
(Translation
of registrant's name into English)
13/F, One International Finance Centre,
1 Harbour View Street, Central,
Hong Kong, China
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports
under
cover Form 20-F or Form 40-F.
Form
20-F X
Form 40-F
Indicate
by check mark whether the registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes
No X
If
"Yes" is marked, indicate below the file number assigned to the
registrant
in
connection with Rule 12g3-2(b): 82-
NEWS RELEASE
30
April 2024
PRUDENTIAL PLC Q1 BUSINESS PERFORMANCE UPDATE
First
quarter new business profit up 11 per cent (excluding economic
impacts)
Performance highlights on a constant (and actual) exchange rate
basis for the three months ended 31 March 2024
●
First quarter 2024 new business profit up 11
per cent excluding economic impacts to $810 million
diversified across our geographical markets. After allowing for
economic impacts, new business profit was broadly unchanged at $726
million.
●
First quarter APE sales were up 7 per
cent (4 per cent) to $1,625 million. The business showed
continued momentum despite strong comparators in Hong Kong and CPL
(described below) and headwinds in Vietnam.
APE new business
sales (APE sales) and EEV new business profit (NBP)
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Constant exchange rate
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Actual exchange rate
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Q1 2024 $m
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Q1 2023 $m
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Change
%
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Q1 2023 $m
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Change
%
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APE sales
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NBP
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APE sales
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NBP
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APE sales
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NBP
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APE sales
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NBP
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APE sales
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NBP
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Total
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1,625
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726
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1,514
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727
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7%
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-%
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1,559
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743
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4%
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(2)%
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Total
new business margin (%)
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45%
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48%
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48%
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Total
excluding economic impacts
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1,625
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810
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1,514
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727
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7%
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11%
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1,559
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743
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4%
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9%
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Total
new business margin excluding economic impacts (%)
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50%
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48%
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48%
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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.”
Market highlights for the three months ended 31 March
2024
In Hong
Kong, we continued to focus on quality growth. Despite the
significant rebound in Q1 2023 where we outperformed the market as
the border reopened, our total APE sales still grew 1 per cent with
both domestic and Chinese Mainland visitor segments growing. The
combined contribution of agency and bancassurance APE sales in Q1
2024 remained broadly consistent with the second half of 2023 as a
proportion of Hong Kong’s total APE sales. For the Chinese
Mainland visitor segment, average case sizes were broadly stable
compared with the levels seen in the second half of last year,
smaller than that seen in the first quarter of 2023. New business
margins increased year-on-year, from 64 per cent to 69 per cent (73
per cent when prepared using economics as at full year 2023),
supported in part by a 16 per cent increase in health and
protection APE sales. The first quarter new business profit grew
more strongly than APE sales reflecting the increase in new
business margin.
Despite
falling 17 per cent year-on-year, APE sales for CITIC Prudential
Life (CPL), our Chinese Mainland joint venture, in the first three
months of 2024 exceeded the total for the last six months of 2023,
for both the agency and bancassurance channels. We continue to
optimise our product portfolio in this market towards long-term
savings, annuities and health and protection. Our continued focus
on quality and product optimisation efforts increased new business
margins by 4 percentage points from the first quarter in the prior
year, excluding the impact of updated economics. CPL’s first
quarter 2024 margin, when prepared using full year 2023 economics,
was consistent with the full year 2023 margin, at 42 per
cent.
The
rebound in sales momentum in Singapore seen in the second half of
2023 continued in the first quarter, with a third sequential
quarter of growth in APE sales. Compared with the first quarter of
2023, APE sales in Singapore increased by 2 per cent and new
business margins improved by 2 percentage points (excluding
economic impacts) leading to an increase in new business
profit.
Our
Malaysian businesses delivered APE growth of 29 per cent compared
with the prior year, driven by a 50 per cent growth in
bancassurance sales underpinned by our strong bank partnerships
particularly that with UOB supported by new product launches.
Health and protection APE sales as a proportion of total sales
increased when compared to the same period in 2023. Higher APE
sales in Malaysia increased new business profit, although margins
declined given the higher proportion of bancassurance
sales.
In
Indonesia, APE sales were down (10) per cent compared with the
first quarter in 2023, following base effects due to regulatory
actions on investment linked products that took effect in the
second quarter of 2023. Bancassurance sales grew significantly by
26 per cent compared with the prior year, driven by growth
through UOB on its expanded customer base following the integration
of Citi Bank. Lower APE sales and channel mix effects in Indonesia
contributed to lower new business profit. We are continuing with
our program of transformation to improve overall productivity and
profitability.
Across
the businesses in our “growth markets and other”
segment a strong increase in APE sales of 28 percent was generated
in total, driven by Thailand, Taiwan, India and Africa. This more
than offset continued weakness in Vietnam. New business margins
declined given business mix effects, but given the significant
growth in APE sales, overall new business profit
increased.
Eastspring’s
funds under management or advice grew to $239 billion at the end of
March 2024 compared to $237 billion at the end of 2023. As well as
strong net inflows from the Group’s insurance business
following continued growth, there were $0.1 billion of net inflows
from third parties (excluding money market funds and funds managed
on behalf of M&G), with strong flows into the retail business
offset by flows out of the institutional business.
Notes
Comparisons
are to the first three months of the prior year unless otherwise
stated and year-on-year percentage changes are provided on a
constant exchange rate basis unless otherwise stated. All results
are presented in US dollars.
See
“Definitions of Performance Metrics” below for
explanation of performance measures used in this
announcement.
Contact:
Media
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|
Investors/Analysts
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Simon
Kutner
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+44
(0)7581 023260
|
Patrick
Bowes
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+852
2918 5468
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Sonia
Tsang
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+852
5580 7525
|
William
Elderkin
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+44
(0)20 3977 9215
|
Sophie
Sophaon
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+852
6286 0229
|
Darwin
Lam
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+852
2918 6348
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About Prudential plc
Prudential
plc provides life and health insurance and asset management in 24
markets across Asia and Africa. Prudential’s mission is to be
the most trusted partner and protector for this generation and
generations to come, by providing simple and accessible financial
and health solutions. The business has dual primary listings on the
Stock Exchange of Hong Kong (2378) and the London Stock Exchange
(PRU). It also has a secondary listing on the Singapore Stock
Exchange (K6S) and a listing on the New York Stock Exchange (PUK)
in the form of American Depositary Receipts. It is a constituent of
the Hang Seng Composite Index and is also included for trading in
the Shenzhen-Hong Kong Stock Connect programme and the
Shanghai-Hong Kong Stock Connect programme.
Prudential
is not affiliated in any manner with Prudential Financial, Inc. a
company whose principal place of business is in the United States
of America, nor with The Prudential Assurance Company Limited, a
subsidiary of M&G plc, a company incorporated in the United
Kingdom.
https://www.prudentialplc.com/
Metrics presented
This
business performance update provides information on the trading and
sales development of the Group in the first three months of 2024.
This update focusses on annual premium equivalent (APE) and new
business profit (NBP), which are key metrics used by the
Group’s management to assess and manage the development and
growth of the business. APE sales are provided as an indicative
volume measure of transactions undertaken in the reporting period
that have the potential to generate profits for shareholders. NBP
is measured in accordance with European Embedded Value (EEV)
Principles and reflects the value of future profit streams which
are not fully captured in shareholders’ equity in the year of
sale under IFRS. Under this methodology, discount rates and other
economic assumptions are updated at the end of each reporting
period to reflect current interest rates, introducing a degree of
volatility into the NBP measure. In addition, the entire NBP
amounts within a given reporting period are updated using end of
period discount rates. In particular, the first three months 2024
NBP contained in this announcement is based on interest rates as at
31 March 2024. When published, the half year 2024 results will
contain NBP for the half year based on interest rates as at 30 June
2024. Consequently, the NBP values for the first three months of
2024 that will be included in the half year 2024 results may differ
to the amounts presented in this announcement. In addition to the
NBP presented as described above, we also present new business
profit excluding economic impacts. This is NBP calculated using
interest rates and other economics at 31 March 2023 to show
underlying growth compared with the prior year. It is based on
average exchange rates for the three months ended 31 March 2024
which are also used to determine the constant exchange rate Q1 2023
amount.
The
presentation of these key metrics is not intended to be considered
as a substitute for, or superior to, financial information prepared
and presented in accordance with IFRS. Further information about
these metrics including a reconciliation of EEV shareholders’
equity for full year 2023 to the most directly comparable IFRS
measure can be found in the Group’s 2023 Annual Report and
Accounts.
Definitions of Performance Metrics
Annual premium equivalent (APE) sales
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.
Eastspring total funds under management or advice
Total
funds under management or advice including external funds under
management, money market funds, funds managed on behalf of M&G
plc and internal funds under management or advice.
New business profit
Presented
on a post-tax basis, on business sold in the year, calculated in
accordance with EEV principles.
New
business profit excluding economic impacts (and the movements
therein) represent the amount of NBP for the first three months of
2024 calculated using economics (including interest rates) as at 31
March 2023 using average exchange rates for the first three months
of 2024. Comparisons are to the Q1 2023 new business profit on a
constant exchange rate basis to indicate underlying
growth.
See the
Prudential 2023 Annual Report for further information on the
metrics above, including reconciliations to IFRS where
appropriate.
Forward-Looking Statements
This
announcement contains 'forward-looking statements' with respect to
certain of Prudential's (and its wholly and jointly owned
businesses’) plans and its goals and expectations relating to
future financial condition, performance, results, strategy and
objectives. Statements that are not historical facts, including
statements about Prudential's (and its wholly and jointly owned
businesses’) beliefs and expectations and including, without
limitation, commitments, ambitions and targets, including those
related to sustainability (including ESG and climate-related)
matters, and statements containing the words 'may', 'will',
'should', 'continue', 'aims', 'estimates', 'projects', 'believes',
'intends', 'expects', 'plans', 'seeks' and 'anticipates', and words
of similar meaning, are forward-looking statements. These
statements are based on plans, estimates and projections as at the
time they are made, and therefore undue reliance should not be
placed on them. By their nature, all forward-looking statements
involve risk and uncertainty.
A
number of important factors could cause actual future financial
condition or performance or other indicated results to differ
materially from those indicated in any forward-looking statement.
Such factors include, but are not limited to:
●
current and future
market conditions, including fluctuations in interest rates and
exchange rates, inflation (including resulting interest rate
rises), sustained high or low interest rate environments, the
performance of financial and credit markets generally and the
impact of economic uncertainty, slowdown or contraction (including
as a result of the Russia-Ukraine conflict, conflict in the Middle
East, and related or other geopolitical tensions and conflicts),
which may also impact policyholder behaviour and reduce product
affordability;
●
asset valuation
impacts from the transition to a lower carbon economy;
●
derivative
instruments not effectively mitigating any exposures;
●
global political
uncertainties, including the potential for increased friction in
cross-border trade and the exercise of laws, regulations and
executive powers to restrict trade, financial transactions, capital
movements and/or investment;
●
the longer-term
impacts of Covid-19, including macro-economic impacts on financial
market volatility and global economic activity and impacts on
sales, claims (including related to treatments deferred during the
pandemic), assumptions and increased product lapses;
●
the policies and
actions of regulatory authorities, including, in particular, the
policies and actions of the Hong Kong Insurance Authority, as
Prudential's Group-wide supervisor, as well as the degree and pace
of regulatory changes and new government initiatives
generally;
●
the impact on
Prudential of systemic risk and other group supervision policy
standards adopted by the International Association of Insurance
Supervisors, given Prudential’s designation as an
Internationally Active Insurance Group;
●
the physical,
social, morbidity/health and financial impacts of climate change
and global health crises, which may impact Prudential's business,
investments, operations and its duties owed to
customers;
●
legal, policy and
regulatory developments in response to climate change and broader
sustainability-related issues, including the development of
regulations and standards and interpretations such as those
relating to sustainability (including ESG and climate-related)
reporting, disclosures and product labelling and their
interpretations (which may conflict and create misrepresentation
risks);
●
the collective
ability of governments, policymakers, the Group, industry and other
stakeholders to implement and adhere to commitments on mitigation
of climate change and broader sustainability-related issues
effectively (including not appropriately considering the interests
of all Prudential’s stakeholders or failing to maintain high
standards of corporate governance and responsible business
practices);
●
the impact of
competition and fast-paced technological change;
●
the effect on
Prudential's business and results from mortality and morbidity
trends, lapse rates and policy renewal rates;
●
the timing, impact
and other uncertainties of future acquisitions or combinations
within relevant industries;
●
the impact of
internal transformation projects and other strategic actions
failing to meet their objectives or adversely impacting the
Group’s operations or employees;
●
the availability
and effectiveness of reinsurance for Prudential’s
businesses;
●
the risk that
Prudential's operational resilience (or that of its suppliers and
partners) may prove to be inadequate, including in relation to
operational disruption due to external events;
●
disruption to the
availability, confidentiality or integrity of Prudential's
information technology, digital systems and data (or those of its
suppliers and partners) including the Pulse platform;
●
the increased
non-financial and financial risks and uncertainties associated with
operating joint ventures with independent partners, particularly
where joint ventures are not controlled by Prudential;
●
the impact of
changes in capital, solvency standards, accounting standards or
relevant regulatory frameworks, and tax and other legislation and
regulations in the jurisdictions in which Prudential and its
affiliates operate; and
●
the impact of legal
and regulatory actions, investigations and disputes.
These
factors are not exhaustive. Prudential operates in a continually
changing business environment with new risks emerging from time to
time that it may be unable to predict or that it currently does not
expect to have a material adverse effect on its business. In
addition, these and other important factors may, for example,
result in changes to assumptions used for determining results of
operations or re-estimations of reserves for future policy
benefits. Further discussion of these and other important factors
that could cause actual future financial condition or performance
to differ, possibly materially, from those anticipated in
Prudential's forward-looking statements can be found under the
'Risk Factors' heading of Prudential’s 2023 Annual Report,
available on Prudential’s website at www.prudentialplc.com.
Any
forward-looking statements contained in this announcement speak
only as of the date on which they are made. Prudential expressly
disclaim any obligation to update any of the forward-looking
statements contained in this announcement or any other
forward-looking statements it may make, whether as a result of
future events, new information or otherwise except as required
pursuant to the UK Prospectus Rules, the UK Listing Rules, the UK
Disclosure Guidance and Transparency Rules, the Hong Kong Listing
Rules, the SGX-ST Listing Rules or other applicable laws and
regulations.
Prudential
may also make or disclose written and/or oral forward-looking
statements in reports filed with or furnished to the US Securities
and Exchange Commission, the UK Financial Conduct Authority, the
Hong Kong Stock Exchange and other regulatory authorities, as well
as in its annual report and accounts to shareholders, periodic
financial reports to shareholders, proxy statements, offering
circulars, registration statements, prospectuses, prospectus
supplements, press releases and other written materials and in oral
statements made by directors, officers or employees of Prudential
to third parties, including financial analysts. All such
forward-looking statements are qualified in their entirety by
reference to the factors discussed under the ‘Risk
Factors’ heading of Prudential’s 2023 Annual
Report.
Cautionary Statements
This
announcement does not constitute or form part of any offer or
invitation to purchase, acquire, subscribe for, sell, dispose of or
issue, or any solicitation of any offer to purchase, acquire,
subscribe for, sell or dispose of, any securities in any
jurisdiction nor shall it (or any part of it) or the fact of its
distribution, form the basis of, or be relied on in connection
with, any contract therefor.
NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO
THE UNITED STATES OF AMERICA
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: 30 April
2024
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PRUDENTIAL
PUBLIC LIMITED COMPANY
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By:
/s/ Ben Bulmer
|
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Ben
Bulmer
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Chief
Financial Officer
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