SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the
month of November, 2023
PRUDENTIAL PUBLIC LIMITED COMPANY
(Translation
of registrant's name into English)
13/F, One International Finance Centre,
1 Harbour View Street, Central,
Hong Kong, China
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports
under
cover Form 20-F or Form 40-F.
Form
20-F X
Form 40-F
Indicate
by check mark whether the registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes
No X
If
"Yes" is marked, indicate below the file number assigned to the
registrant
in
connection with Rule 12g3-2(b): 82-
6 November 2023
PRUDENTIAL PLC Q3 BUSINESS PERFORMANCE UPDATE
Year to date new business performance remains strong
Performance highlights on a
constant1 (and
actual) exchange rate basis for the nine months ended 30 September
2023
●
Year to date
new business profit2 was
up 37 per cent (34
per cent) to $2,143 million with Q3 business momentum continuing to
reflect the strength of our multi market, multi-channel strategy.
Excluding economic impacts3 new
business profit was up 48 per cent (45 per cent), with margins
improved due to positive developments in channel and geographic mix
..
●
Year to date
APE sales4 were
up 40 per cent (36
per cent) to $4,417 million led by Hong Kong, with increased sales
to both Chinese Mainland visitors and Domestic customers compared
with the same period last year.
APE new
business sales4 (APE
sales) and EEV new business profit2(NBP)
|
|
|
|
Actual exchange rate
|
|
Constant exchange rate
|
|
YTD 30.09.2023 $m
|
|
YTD 30.09.2022 $m
|
Change
%
|
|
YTD 30.09.2022 $m
|
Change
%
|
|
APE sales
|
NBP
|
|
APE sales
|
NBP
|
APE sales
|
NBP
|
|
APE sales
|
NBP
|
APE sales
|
NBP
|
Total
|
4,417
|
2,143
|
|
3,247
|
1,597
|
36%
|
34%
|
|
3,147
|
1,562
|
40%
|
37%
|
Total new business margin (%)
|
|
49%
|
|
|
49%
|
|
|
|
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50%
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CEO Anil Wadhwani, said: "The
new business momentum we saw in the first half of 2023 continued in
the third quarter. The strength of our distribution capabilities
and the diversification of the business across markets, products
and channels drove
our performance in the nine months to 30 September 2023, with
fifteen of our life markets across Asia and Africa delivering
double-digit growth in new business profit.
"Consumer demand in Asia remained resilient and we have seen
ongoing demand for both savings and health and protection products
from both Domestic and Chinese Mainland visitor customers in Hong
Kong. At the same time, several of our ASEAN5 based
businesses have seen double-digit growth in new business profit for
the first nine months of 2023. In the Chinese Mainland, the
industry-wide changes in both product and bancassurance
distribution regulations and our pro-active actions to diversify
product mix are leading to some disruption in sales. However, these
changes are expected to be beneficial to the development of the
domestic industry by increasing the role for insurance to meet
customer needs and providing continuing demand for long-term
savings and health and protection products.
"We are focused on the execution of our recently announced
five-year strategy designed to enhance the Group's operational
efficiency and increase the productivity of our agency and bank
distribution channels. We continue to build our core capabilities
across our strategic pillars of Customer, Distribution and Health
and supporting enablers including Technology. In this regard we
have recently appointed Ashley Veasey as our new Chief Information
Technology Officer, reflecting the importance of technology and
innovation in enhancing our customer and distribution
experiences".
Going forward, Prudential plans to provide business performance
updates for the first three months and nine months of the
year.
Outlook
Our diversified business model and strong capitalisation positions
us well to navigate ongoing challenges in the macro-economic and
geopolitical environment. Looking forward the environment continues
to be challenging but new business momentum has continued into the
fourth quarter supported by our multi-market growth
engine.
Performance summary for the nine months ended 30 September
2023
APE sales grew significantly compared with the same period in 2022
and, excluding economic impacts, new business margins
improved3 due
to positive developments in channel and geographic mix. Health and
protection products accounted for 37 per cent of our total new
business profit. APE sales through the agency channel increased by
81 per cent while new business profits were up 62 per
cent6 from
the equivalent period in the prior year despite the negative impact
from interest rate movements. The increased agency APE sales
reflected the continued demand from Chinese Mainland visitors and
Domestic customers in Hong Kong and an improvement in agency
production in the majority of the other markets. APE sales through
the bancassurance channel increased 3 per cent compared with the
same period last year. This was mainly a result of new products and
bank partners in Taiwan, an improvement in Malaysia and the
continued success of our multi-currency savings product in Hong
Kong, partially offset by headwinds to sales through the Chinese
Mainland bancassurance
channel and reduced consumer sentiment in
Vietnam.
Market highlights for the nine months ended 30 September
2023
In Hong Kong, APE sales to both Domestic customers and Chinese
Mainland visitors grew strongly compared with the same period in
the prior year. The Hong Kong economy continued to recover year on
year led by inbound tourism and domestic demand, with over 8
million people from the Chinese Mainland visiting Hong Kong in the
third quarter of 2023. Visitor numbers in the discrete third
quarter were circa 90 per cent of that in the same period of 2019,
while APE sales to Chinese Mainland visitors in the same period
were circa 1.3 times of that in 2019. In addition to these sales we
also saw double-digit growth in the Domestic segment's new business
profit in the discrete third quarter of 2023 compared with the same
period in the prior year. While the appetite for savings products
remained elevated in Q3, the case sizes started to normalise after
the initial border reopening earlier this year. Health and
protection sales contributed to more than a third of the new
business profit with growth in both the agency and bancassurance
channels. Consequently, the new business margin increased
sequentially for each quarter of 2023, if economic effects were
excluded7.
In the Chinese Mainland, our pro-active actions to diversify
product mix and the implementation of the anticipated regulatory
changes resulted, as expected, in a decline in APE sales at CITIC
Prudential Life (CPL) in the first nine months of the year. CPL's
APE sales declined further in the third quarter when compared with
the prior period due to the revisions to products required by the
regulatory changes for bancassurance announced in the quarter. New
business profit for the agency channel grew in the first nine
months offset by a decline in the bancassurance channel. New
business margins improved for both channels in the discrete third
quarter supported by a shift in product mix to health and
protection, particularly within the agency channel. Agency
productivity measured by cases per active agent recorded
double-digit growth in the third quarter8.
We are confident that the continued focus on quality establishes a
good foundation for future growth.
Within our larger ASEAN5 based
businesses:
o Indonesia
and Malaysia saw continued momentum in APE sales and new business
profit for the year to date. In Indonesia, the positive effect on
new business profits from product repricing and upgrades seen in
the first half of 2023 moderated in the third quarter, but the
overall growth in new business profit remained robust. In Malaysia
we continue to take actions to improve productivity by developing
programs to support both new and established agents which have seen
productivity9 increase
consistently each quarter since the start of
2023.
o In
Singapore, the strength of our franchise and the quality of our
distribution model saw APE sales increasing year on year in the
discrete third quarter. This was aided by a rebound of the
bancassurance channel as the benefit of new regular premium product
launches came through. Given the impact and challenges of higher
interest rates on sales in the first half of the year, total new
business profits for the first nine months of the year were lower
than the same period in the prior year. Our continued focus on
customer experience resulted in recognition by The Straits Times as
the top insurer for customer service.
o In
Vietnam APE sales and new business profit when compared to the
corresponding period declined more in the third quarter than the
first half of 2023 reflecting an industry-wide fall in consumer
sentiment. However, the business's focus on customers and the
strength of its agency force has seen it outperform the market,
increase its market share and maintain its number one position in
the market10.
Both ICICI Prudential Life and Africa delivered double-digit growth
for APE sales and new business profits in the nine months to 30
September compared with the same period in the prior year. ICICI
Prudential Life has seen recent growth in its retail protection
sales, improving persistency and is focused on innovating product
design to meet customer needs.
Eastspring's third party flows (excluding money market funds and
funds managed on behalf of M&G) increased in the third quarter
to give a total year to date net inflow of $2.1 billion, driven by
retail clients with net inflows into higher margin retail equity
funds. Market movements and foreign exchange rate effects in the
third quarter together with the redemption of funds managed on
behalf of M&G plc led to a reduction in funds under management
to $216 billion at the end of September 2023 compared to $221
billion11 at
the end of 2022. The overall asset mix has remained stable and
continued to be diversified across both clients and asset
classes.
Notes
1
Comparisons are to the first nine 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.
2
New business profit, on a post-tax basis, on business sold in the
period, calculated in accordance with EEV Principles. Amounts for
joint ventures and associates are included on the basis of the
Group's proportionate share. See the EEV basis results in
Prudential's Half Year 2023 Report for further
explanation.
3
This is a comparison with the first nine months of 2022 if new
business profit for the first nine months of 2023 had been
calculated using economics (including interest rates) as at 30
September 2022.
4
APE sales is a measure of new business activity that comprises the
aggregate of annualised regular premiums and one-tenth of single
premiums on new business written during the year for all insurance
products, including premiums for contracts designated as investment
contracts under IFRS. Amounts for joint ventures and associates are
included on the basis of the Group's proportionate share. It is not
representative of revenue recorded in the IFRS financial
statements. See note II of the Additional financial information in
Prudential's Half Year 2023 Report for further
explanation.
5
Markets within the Association of Southeast Asian
Nations.
6
Excluding the effects of economics, the new business profit for
agency channel increased by 74 per cent.
7
Based on a consistent set of economics including interest rates (31
March 2023).
8
Double-digit growth in agent productivity measured over the nine
months to 30 September 2023 compared to the nine months to 30
September 2022, and also measured over the discrete 3 months to 30
September 2023 compared to the discrete 3 months to 30 September
2022.
9
Agency productivity by reference to APE sales per active
agent.
10
Source: Q3 2023 Vietnam Actuarial Network data.
11
On an actual exchange rate basis.
Contact:
Media
|
|
Investors/Analysts
|
|
Simon Kutner
|
+44 (0)7581 023260
|
Patrick Bowes
|
+852 9611 2981
|
Sonia Tsang
|
+852 5580 7525
|
William Elderkin
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+44 (0)20 3977 9215
|
Sophie Sophaon
|
+852 6286 0229
|
Darwin Lam
|
+852 2918 6348
|
About Prudential plc
Prudential plc provides life and health insurance and asset
management in 24 markets across Asia and Africa. Prudential's
mission is to be the most trusted partner and protector for this
generation and generations to come, by providing simple and
accessible financial and health solutions. The
business has dual primary listings on the Stock Exchange of Hong
Kong (2378) and the London Stock Exchange (PRU). It also has a
secondary listing on the Singapore Stock Exchange (K6S) and a
listing on the New York Stock Exchange (PUK) in the form of
American Depositary Receipts. It is a constituent of the Hang Seng
Composite Index and is also included for trading in the
Shenzhen-Hong Kong Stock Connect programme and the Shanghai-Hong
Kong Stock Connect programme.
Prudential is not affiliated in any manner with Prudential
Financial, Inc. a company whose principal place of business is in
the United States of America, nor with The Prudential Assurance
Company Limited, a subsidiary of M&G plc, a company
incorporated in the United Kingdom.
https://www.prudentialplc.com/
Metrics presented
This business performance update provides relevant information on
the trading and sales development of the Group in the first nine
months of 2023. This update focusses on annual premium equivalent
(APE) and new business profit (NBP), which are key metrics used by
the Group's management to assess and manage the development and
growth of the business. APE sales are provided as an indicative
volume measure of transactions undertaken in the reporting period
that have the potential to generate profits for shareholders. NBP
is measured in accordance with European Embedded Value (EEV)
Principles and reflects the value of future profit streams which
are not fully captured in shareholders' equity in the year of sale
under IFRS. Under this methodology, discount rates and other
economic assumptions are updated at the end of each reporting
period to reflect current interest rates, introducing a degree of
volatility into the NBP measure. In addition, the entire NBP
amounts within a given reporting period are updated using end of
period discount rates. In particular, the first nine months 2023
NBP contained in this announcement is based on interest rates as at
30 September 2023. When published, the full year 2023 results will
contain NBP for the full year based on interest rates as at 31
December 2023. Consequently, the NBP values for the first nine
months of 2023 that will be presented in the full year 2023 results
may differ to the amounts included in this
announcement.
The presentation of these key metrics is not intended to be
considered as a substitute for, or superior to, financial
information prepared and presented in accordance with IFRS
Standards. Further information about these metrics including a
reconciliation of EEV shareholders' equity for half year 2023 to
the most directly comparable IFRS measure can be found in the
Group's Half year 2023 Report.
Forward-looking statements
This announcement contains 'forward-looking statements' with
respect to certain of Prudential's (and its wholly and jointly
owned businesses') plans and its goals and expectations relating to
future financial condition, performance, results, strategy and
objectives. Statements that are not historical facts, including
statements about Prudential's (and its wholly and jointly owned
businesses') beliefs and expectations and including, without
limitation, commitments, ambitions and targets, including those
related to ESG matters, and statements containing the words 'may',
'will', 'should', 'continue', 'aims', 'estimates', 'projects',
'believes', 'intends', 'expects', 'plans', 'seeks' and
'anticipates', and words of similar meaning, are forward-looking
statements. These statements are based on plans, estimates and
projections as at the time they are made, and therefore undue
reliance should not be placed on them. By their nature, all
forward-looking statements involve risk and
uncertainty.
A number of important factors could cause actual future financial
condition or performance or other indicated results to differ
materially from those indicated in any forward-looking statement.
Such factors include, but are not limited to:
●
current and future market conditions,
including fluctuations in interest rates and exchange rates,
inflation (including resulting interest rate rises), sustained high
or low interest rate environments, the performance of financial and
credit markets generally and the impact of economic uncertainty,
slowdown or contraction (including as a result of the
Russia-Ukraine conflict, the conflict in the Middle East and
related or other geopolitical tensions and conflicts), which may
also impact policyholder behaviour and reduce product
affordability;
●
asset valuation impacts from the
transition to a lower carbon economy;
●
derivative instruments not
effectively mitigating any exposures;
●
global political uncertainties,
including the potential for increased friction in cross-border
trade and the exercise of laws, regulations and executive powers to
restrict trade, financial transactions, capital movements and/or
investment;
●
the longer-term impacts of
Covid-19, including macro-economic impacts on financial market
volatility and global economic activity and impacts on sales,
claims (including related to treatments deferred during the
pandemic), assumptions and increased product
lapses;
●
the policies and actions of regulatory
authorities, including, in particular, the policies and actions of
the Hong Kong Insurance Authority, as Prudential's Group-wide
supervisor, as well as the degree and pace of regulatory changes
and new government initiatives generally;
●
the impact on Prudential of systemic
risk and other group supervision policy standards adopted by the
International Association of Insurance Supervisors, given
Prudential's designation as an Internationally Active Insurance
Group;
●
the physical, social, morbidity/health
and financial impacts of climate change and global health crises,
which may impact Prudential's business, investments, operations and
its duties owed to customers;
●
legal, policy and regulatory
developments in response to climate change and broader
sustainability-related issues, including the development of
regulations and standards and interpretations such as those
relating to ESG reporting, disclosures and product labelling and
their interpretations (which may conflict and create
misrepresentation risks);
●
the collective ability of
governments, policymakers, the Group, industry and other
stakeholders to implement and adhere to commitments on mitigation
of climate change and broader sustainability-related issues
effectively (including not appropriately considering the interests
of all Prudential's stakeholders or failing to maintain high
standards of corporate governance and responsible business
practices);
●
the impact of competition and
fast-paced technological change;
●
the effect
on Prudential's business and results from, in particular, mortality
and morbidity trends, lapse rates and policy renewal
rates;
●
the timing, impact and other
uncertainties of future acquisitions or combinations within
relevant industries;
●
the impact of internal transformation
projects and other strategic actions failing to meet their
objectives or adversely impacting the Group's
employees;
●
the availability and
effectiveness of reinsurance for Prudential's
businesses;
●
the risk that Prudential's operational
resilience (or that of its suppliers and partners) may prove to be
inadequate, including in relation to operational disruption due to
external events;
●
disruption to the availability,
confidentiality or integrity of Prudential's information
technology, digital systems and data (or those of its suppliers and
partners) including the Pulse platform;
●
the increased non-financial and
financial risks and uncertainties associated with operating joint
ventures with independent partners, particularly where joint
ventures are not controlled by Prudential;
●
the impact of changes in capital,
solvency standards, accounting standards or relevant regulatory
frameworks, and tax and other legislation and regulations in the
jurisdictions in which Prudential and its affiliates operate;
and
●
the impact of legal and
regulatory actions, investigations and
disputes.
These factors are not exhaustive. Prudential operates in a
continually changing business environment with new risks emerging
from time to time that it may be unable to predict or that it
currently does not expect to have a material adverse effect on its
business. In addition, these and other important factors may, for
example, result in changes to assumptions used for determining
results of operations or re-estimations of reserves for future
policy benefits. Further discussion of these and other important
factors that could cause actual future financial condition or
performance to differ, possibly materially, from those anticipated
in Prudential's forward-looking statements can be found under the
'Risk Factors' heading of Prudential's Half year 2023 Report and
2022 Annual Report. Such reports are available on Prudential's
website at www.prudentialplc.com.
Any forward-looking statements contained in this announcement speak
only as of the date on which they are made. Prudential expressly
disclaims any obligation to update any of the forward-looking
statements contained in this announcement or any other
forward-looking statements it may make, whether as a result of
future events, new information or otherwise except as required
pursuant to the UK Prospectus Rules, the UK Listing Rules, the UK
Disclosure Guidance and Transparency Rules, the Hong Kong Listing
Rules, the SGX-ST Listing Rules or other applicable laws and
regulations.
Prudential may also make or disclose written and/or oral
forward-looking statements in reports filed with or furnished to
the US Securities and Exchange Commission, the UK Financial Conduct
Authority, the Hong Kong Stock Exchange and other regulatory
authorities, as well as in its annual report and accounts to
shareholders, periodic financial reports to shareholders, proxy
statements, offering circulars, registration statements,
prospectuses, prospectus supplements, press releases and other
written materials and in oral statements made by directors,
officers or employees of Prudential to third parties, including
financial analysts. All such forward-looking statements are
qualified in their entirety by reference to the factors discussed
under the 'Risk Factors' heading of Prudential's Half year 2023
Report and 2022 Annual Report.
Cautionary statements
This announcement does not constitute or form part of any offer or
invitation to purchase, acquire, subscribe for, sell, dispose of or
issue, or any solicitation of any offer to purchase, acquire,
subscribe for, sell or dispose of, any securities in any
jurisdiction nor shall it (or any part of it) or the fact of its
distribution, form the basis of, or be relied on in connection
with, any contract therefor.
NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO
THE UNITED STATES OF AMERICA
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: 6
November 2023
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PRUDENTIAL
PUBLIC LIMITED COMPANY
|
|
|
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By: /s/ Ben
Bulmer
|
|
|
|
Ben Bulmer
|
|
Chief
Financial Officer
|
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