Prudential H1 profits rise as new CEO unveils pivot towards Asia

Insurer Prudential on Wednesday posted a better-than-expected 6% rise in first-half operating profits as Chinese investors bought its products in Hong Kong after Covid restrictions were lifted, and also outlined a new investment strategy pivot towards Asia.

Source: Sharecast

Adjusted operating profit of the London and Hong Kong dual-listed company was came in at $1.46bn for the six months to June 30, compared with $1.41bn a year earlier and company-compiled estimates of $1.38bn.

Chief executive Anil Wadhwani, who joined the insurer in February, also unveiled a new strategy to target investment in structural growth markets across Asia and Africa.

Prudential said it expected the plan to generate 15-20% compound annual growth in new business profit by 2027, and achieve double-digit compound annual growth in operating free surplus in the same period.

Prudential's annualised premium equivalent (APE) sales, rose 37% to $3bn on a stronger pickup in sales from Chinese mainland visitors to Hong Kong. This figure also beat the consensus forecast of $2.93bn.

"Prospects in China are also receiving a twin boost, despite the current economic uncertainty. On the one hand, regulatory proposals in the region are favourable for insurance markets, while ... demographics are also improving given an ageing population, an emerging middle class and rapid urbanisation, to which Prudential is attuned," said Interactive Investor head of markets Richard Hunter.

"Asia generally has low levels of life insurance penetration compared to more developed markets, given that state provision of pensions and social security is limited."

"However, it has not all been plain sailing for Prudential over recent months, especially as the Chinese economy has failed to maintain any momentum gained after the reopening of the economy post-Covid .. and Prudential shares have dropped by 22% over the last six months."

"Despite this decline, the shares have managed a gain of 8% over the last year, as compared to a marginal rise of 1.4% for the wider FTSE100. An increase to the dividend (albeit at a projected yield of a pedestrian 1.6%) is a further sign of confidence, and Prudential has also indicated that the strong sales momentum is spilling over into the current quarter. "

Reporting by Frank Prenesti for Sharecast.com

Isin: GB0007099541
Exchange: London Stock Exchange
Sell:
755.20 p
Buy:
756.40 p
Change: 27.60 ( 3.79 %)
Date:
Prices delayed by at least 15 minutes

Compare our accounts

Whether you're looking for a Share Dealing Account, Stocks and Shares ISA or a Self-Invested Personal Pension (SIPP), we've got an account to suit your needs.

Bank of Scotland is not responsible for the content and accuracy of the Markets News articles. We may not share the views of the author. Understand the risks, please remember the value of your investment can go down as well as up and you may not get back the full amount you invest. We don't provide advice so if you are in any doubt about buying and selling shares or making your own investment decisions we recommend you seek advice from a suitably qualified Financial Advisor. Past performance is not a guide to future performance.

Important legal information

Bank of Scotland Share Dealing Service is operated by Halifax Share Dealing Limited. Halifax Share Dealing Limited. Registered in England and Wales No. 3195646. Registered Office: Trinity Road, Halifax, West Yorkshire HX1 2RG. Authorised and regulated by the Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN under number 183332. A Member of the London Stock Exchange and an HM Revenue & Customs Approved ISA Manager.

Logo Allfunds

The information contained within this website is provided by Allfunds Digital, S.L.U. acting through its business division Digital Look Ltd unless otherwise stated. The information is not intended to be advice or a recommendation to buy, sell or hold any of the shares, companies or investment vehicles mentioned, nor is it information meant to be a research recommendation. This is a solution powered by Allfunds Digital, S.L.U. acting through its business division Digital Look Ltd incorporating their prices, data news, charts, fundamentals and investor tools on this site. Terms and conditions apply. Prices and trades are provided by Allfunds Digital, S.L.U. acting through its business division Digital Look Ltd and are delayed by at least 15 minutes.

FE fundinfo Logo

Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.

Refinitiv Logo

© 2024 Refinitiv, an LSEG business. All rights reserved.