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Prudential reported ‘high-quality, resilient growth’ on Wednesday, though the Asia-focused insurer cautioned that Covid-19-related uncertainty in Hong Kong could continue.
Prudential shares rose 6.9% to 1,098.00 pence each in London on Wednesday morning.
For 2021, pretax profit slipped by 5.0% to $3.02 billion from $3.18 billion in 2020.
New business profit, however, rose by 13%, however, to $2.53 billion from $2.20 billion. It was a revival of fortunes for the insurer, as its new business profit in Asia had fallen 38% in 2020.
Since the end of 2020, Prudential completed the demerger of its former US Jackson arm in September.
European Embedded Value operating profit increased 4.1% to $3.54 billion from $3.40 billion.
Total revenue, net of reinsurance, dropped 27% to $26.50 billion from $36.25 billion.
Gross premiums earned rose 3.1% to $24.22 billion from $23.50 billion, but Prudential saw a marked drop in investment return of $3.49 billion from $13.76 billion.
Annual premium equivalents - a measure of the new policies sold - grew 8% to $4.19 billion from $3.81 billion. Present value of new business premiums rose 12% to $24.15 billion from $21.59 billion.
‘Sales in Hong Kong continued to be constrained by the ongoing closure of the border with mainland China. However, excluding Hong Kong, APE sales were 16% higher. Eight markets in Asia and our Africa business saw double-digit growth including mainland China, India, Malaysia, the Philippines, Singapore and Thailand. The increase in APE sales, combined with an improvement in new business margins given a favourable shift in business mix, resulted in a 13% increase in group new business profit,’ Pru explained.
The company raised its annual payout by 7.0% to 17.23 cents per share from 16.10 cents. Its second interim payout alone was up 11% to 11.86 cents.
Prudential has entered 2022 ‘with a strong balance sheet and capital position’, however, it noted the timing of Hong Kong's border reopening is uncertain. Covid-19 will also ‘continue to have an impact’.
‘The current conflict in Ukraine could have wider implications for global economic and market conditions as well as geopolitical relations. However, we believe our multi-channel approach and focus on quality business and operating efficiency is the right strategy for dealing with volatile operating conditions. We are confident that our investment in new business, distribution and product enhancements will continue to meet the needs of our customers and build value for our shareholders over the long term,’ the company added.
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