Prudential reports continued progress in H1 2024 results

Prudential reports continued progress in H1 2024 results | Insurance Business Asia

Insurance News

Prudential reports continued progress in H1 2024 results

New business profit rises; share buyback program and dividend also increase

Insurance News

By
Kenneth Araullo

Prudential plc has released its financial results for the first half of 2024, showing mixed outcomes across key metrics.

On a constant exchange rate basis, Prudential reported a new business profit of $1.47 billion, an increase of 8%, excluding interest rate and other economic impacts. Adjusted for these impacts, the figure was up 1%.

The company’s adjusted operating profit rose 9% to $1.54 billion. Additionally, the first interim dividend was raised by 9% to 6.84 cents per share, up from 6.26 cents in the same period last year.

The insurer also noted progress in its $2 billion share buyback programme, with 22 million shares repurchased as of 22 August 2024, amounting to £150 million ($192 million).

As of June 30, 2024, EEV shareholders’ equity, before minority interests, stood at 1,644 cents per share, slightly down from 1,650 cents at the end of 2023. After accounting for minority interests, the figure was 1,575 cents per share.

The company’s free surplus ratio fell to 232% from 242% at the end of December 2023. The GWS shareholder capital surplus over GPCR stood at $15.2 billion, equating to a cover ratio of 282%, down from 295% at the end of the previous year.

Prudential’s CEO, Anil Wadhwani (pictured above), reiterated the company’s strategic focus for 2027, which includes achieving a compounded annual growth rate for new business profit of 15% to 20%, and double-digit growth in cash generation.

Wadhwani highlighted the 8% growth in new business profit in the first half of 2024, as well as the company’s continued strong performance in adjusted operating profit, which increased by 9%. He noted that these gains followed an exceptional 47% growth in new business profit for the full year 2023, primarily driven by the reopening of Hong Kong’s border with Mainland China.

Wadhwani also mentioned the ongoing $2 billion share buyback programme, which is intended to return capital to shareholders while Prudential continues to invest in growth opportunities.

What’s on the horizon for Prudential?

The company said that its performance in the first half of 2024 reflects efforts to adapt to changing regulatory and macroeconomic conditions, particularly in the Chinese Mainland. Prudential also took proactive measures in medical repricing in Indonesia and Malaysia.

Other key markets, including Singapore, India, and Taiwan, showed positive results due to product innovation and expanded distribution capabilities.

Prudential also noted that it continues to focus on converting new business profit to cash, managing operational variances, and leveraging scale benefits. In terms of distribution, the company acknowledged a decrease in agency new business profit, attributed to high base effects from 2023.

However, efforts to enhance agency growth through quality recruitment and digital platforms like PRUForce are ongoing. Bancassurance delivered strong results, with a 28% growth in new business profit in the first half of 2024, excluding economic impacts, particularly in markets such as Hong Kong, Malaysia, Singapore, Taiwan, and Thailand.

Looking ahead, Prudential has seen increased sales momentum starting in June, which is expected to continue into the second half of the year. The company anticipates new business profits in 2024 to grow at a rate consistent with its 2022-2027 objectives.

The structural growth drivers in Asia and Africa remain robust, with sustained demand for protection, long-term savings, and retirement solutions. Prudential remains confident in achieving its financial and strategic goals by 2027.

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