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)
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 | Investors/Analysts | ||
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| Sophie Sophaon | +852 6286 0229 | Darwin Lam | +852 2918 6348 |