Prudential plc today announced its financial results for the six months ended 30 June 2023 along with a strategic update.
Strategic update
Alongside interim results, CEO Anil Wadhwani announced a new purpose and strategy following the completion of his strategic and operational review.
Prudential’s new purpose statement – For Every Life, For Every Future – reflects its mission to be the most trusted partner and protector for this generation and generations to come, by providing simple and accessible financial and health solutions.
Prudential’s new strategy will build a sustainable growth platform, through targeted investment in structural growth markets across Asia and Africa by:
· Enhancing customer experiences to drive higher acquisition and loyalty for lifetime value creation;
· Technology-powered distribution with a focus on agency and bancassurance productivity and activation;
· Unlocking the health opportunity by disciplined implementation of best practices across all our markets;
· More consistent execution across each of our markets, driven through changes in our organisational model and technology platform; and
· Prioritising value creation, focusing on the generation of free surplus that can be used to invest in new business at attractive returns, core capabilities and strategic opportunities, as well as return capital to shareholders via dividends.
We believe our new strategy will accelerate value creation for all our stakeholders through operational and financial discipline, with two key financial objectives:
· Growing New Business Profit at 15-20 per cent compound annual growth between 2022 and 202712;
· Achieving double-digit compound annual growth in operating free surplus generated from in-force insurance and asset management business between 2022 and 202712.
| Summary financials | Half year2023 $m | Half year2022 $m | Change onAER basis1 | Change onCER basis1 |
| New business profit2 | 1,489 | 1,098 | 36% | 39% |
| Operating free surplus generated13 | 1,024 | 1,224 | (16)% | (15)% |
| Operating free surplus generated from in-force insurance andasset management business6 | 1,438 | 1,503 | (4)% | (2)% |
| Adjusted operating profit5 | 1,462 | 1,411 | 4% | 6% |
| IFRS profit (loss) after tax | 947 | (1,505) | n/a | n/a |
| 30 Jun 2023 | 31 Dec 2022 | |||
| Total | Per share | Total | Per share | |
| EEV shareholders’ equity | $43.7bn | 1,588¢ | $42.2bn | 1,534¢ |
| IFRS shareholders’ equity | $17.2bn | 623¢ | $16.7bn | 608¢ |
| Adjusted IFRS shareholders’ equity9 | $36.4bn | 1,324¢ | $35.2bn | 1,280¢ |
Commenting on his first Interim results and strategic update, CEO Anil Wadhwani, said: “The interim results demonstrate the power of our multi-engine, multi-channel business model across Asia and Africa. The business performed strongly in the first half of 2023, with new business profit up 39 per cent14. (up 52 per cent14 on an ex-economics basis – i.e. excluding the effect of interest rates). APE sales were up 42 per cent14 to $3,027 million and this sales momentum continues into the current third quarter.
“Our agency channel has rebounded strongly in all segments as Covid restrictions ended, reporting 89 per cent14 growth in new business profit on an ex-economics basis. The bancassurance channel maintained margins (on an ex-economics basis) despite lower sales in Singapore, Vietnam and the Chinese Mainland.
“13 of 22 life markets3 recorded positive Health & Protection new business profit growth. We continue to see increased agency adoption of digital tools. In 2022 agents using PRULeads, our activity and leads management engine, were 30 per cent more productive15.
“Prudential has a great franchise with 175 years of history, top three positions16 in 12 of our 14 Asia life markets and 4 of our 8 Africa life markets, scale in both agency and bancassurance, and more importantly the trust of our 18 million customers. We also have in-house investment capabilities with Eastspring managing over $220 billion of assets.
“We have today announced that we will do things differently in the way we run Prudential. With a clear strategy, operational and capital allocation priorities, we are focused on delivering sustainable value for all our stakeholders: employees, customers, shareholders and our communities.
“We are excited to write the next chapter of growth at Prudential.”