PRUDENTIAL PLC FIRST QUARTER 2010 INTERIM MANAGEMENT STATEMENT NEW RECORD FOR FIRST QUARTER NEW BUSINESS SALES AT GBP807 MILLION * GROUP-WIDE SALES OF GBP807 MILLION UP 26 PER CENT. NEW BUSINESS PROFIT UP 27 PER CENT * OUTSTANDING FIRST QUARTER IN ASIA. SALES UP 30 PER CENT, NEW BUSINESS PROFIT UP 35 PER CENT * CONTINUED POWERFUL MOMENTUM IN US. SALES UP 39 PER CENT, NEW BUSINESS PROFIT UP 25 PER CENT * UK FOCUS ON VALUE OVER VOLUME DELIVERS HIGH MARGINS * ASSET MANAGEMENT NET INFLOWS OF GBP1.2 BILLION * CAPITAL POSITION REMAINS STRONG - IGD SURPLUS ESTIMATED AT GBP3.4 BILLION (1) Q1 2010 Q1 2009 % change on Q1 09 Group Insurance (2, 3) Sales - APE GBP807m GBP640m 26% New Business Profit (4) GBP427m GBP336m 27% Margin - APE % 53% 53% - Investment Net Inflows GBP1,203m GBP2,728m (56%) Tidjane Thiam, Group Chief Executive said: "Our record performance in 2009 continued into the first quarter of 2010. We maintained our focus of allocating capital to the most profitable opportunities, and as a result have delivered strong growth in new business profit. This first quarter interim management statement represents a significant evolution in our financial communication as it includes for the first time new business profit, as well as new business sales. This change reflects our continued commitment to greater disclosure. In the first quarter, APE new business across the Group was GBP807 million, up 26 per cent (first quarter 2009: GBP640 million), and new business profit was GBP427 million, up almost GBP100 million and 27 per cent (first quarter 2009: GBP336 million). In Asia we delivered strong growth in new business compared to the first quarter 2009. APE sales in the first quarter 2010 were GBP359 million, an increase of 30 per cent on the first quarter last year of GBP276 million. New business profit for the first quarter was GBP183 million, an increase of 35 per cent. This performance demonstrates the strength of our businesses in Asia and emphasises the return to economic growth experienced across the region. In the US, Jackson's focused approach and strict pricing discipline also delivered an improved first quarter with new business profit of GBP175 million, up 25 per cent (first quarter 2009: GBP140 million)and APE new business sales of GBP255 million up 39 per cent (first quarter 2009: GBP184 million). We maintained our deliberate emphasis on variable annuities in which we ranked fourth in the US in 2009, with a market share of 8 per cent. Prudential UK continued to serve targeted segments of the retirement savings and income markets, emphasising value over volume. This strategy delivered attractive returns on the capital employed in the first quarter. New business profit was GBP69 million, up 15 per cent (first quarter 2009: GBP60 million) and APE new business sales were GBP193 million, up 7 per cent (first quarter 2009: GBP180 million). M&G continued to outperform the market with net fund inflows in the first quarter of GBP1,889 million (first quarter 2009: GBP2,543 million). After making allowance for the exceptional nature of the inflows into corporate bond funds in the first quarter of 2009, this is a very strong performance in a reinvigorated and competitive environment. Our performance has been delivered while taking a disciplined approach to risk management and targeted Group-wide actions to protect our strong capital position. Our estimated IGD surplus was GBP3.4 billion at 31 March 2010 (31 December 2009 GBP3.4 billion). This capital strength underpins our ability to exploit growth opportunities. In 2010 we said that we would accelerate our proven strategy to capitalise on the most profitable growth opportunities in our chosen markets and these strong results demonstrate we are delivering on that objective. Going forward, we expect momentum in Asia to continue, whilst the economic conditions in the UK and the US stabilise." Notes 1 Before allowing for the 2009 final dividend 2 Asia 2010 and 2009 comparative APE new business sales and new business profit exclude the Taiwan agency business disposed of during Q2 2009 and the Japanese insurance operations which we have closed to new business from 15 February 2010 3 Unless otherwise stated all growth rates are on a sterling basis. Growth rates on constant currency are presented on schedule 1B of the Interim Management Statement 4 For Q1 2010 we have presented new business profit and margin for the 3 month period ended 31 March 2010 and the comparative period. The assumptions underlying new business profit are presented in schedule 5 to the Interim Management Statement 1. Q1 2010 Business Unit financial highlights Sales - APE Q1 2010 Q1 2009 % change on Q1 09 Insurance Asia (5) GBP359m GBP276m 30% US GBP255m GBP184m 39% UK GBP193m GBP180m 7% Total Group Insurance GBP807m GBP640m 26% New Business Profit(6) Q1 2010 Q1 2009 % change on Q1 09 Asia GBP183m GBP136m 35% US GBP175m GBP140m 25% UK GBP69m GBP60m 15% Total Group Insurance GBP427m GBP336m 27% Q1 2010 Q1 2009 %pts Margin - APE % Asia 51% 49% +2pts US 69% 76% -7pts UK 36% 33% +3pts Total Group Insurance 53% 53% 0pts Investment Net Inflows Q1 2010 Q1 2009 % change on Q1 09 M&G GBP1,889m GBP2,543m (26%) Asia Asset Management (GBP686m) GBP185m (471%) Total GBP1,203m GBP2,728m (56%) Notes 5 Asia 2010 and 2009 comparative APE new business sales and new business profit exclude the Taiwan agency business disposed of during Q2 2009 and the Japanese insurance operations which we have closed to new business from 15 February 2010 6 For Q1 2010 we have presented new business profit and margin for the 3 month period ended 31 March 2010 and the comparative period. The assumptions underlying new business profit are presented in schedule 5 to the Interim Management Statement Please follow the link below to view the full announcement; http://www.rns-pdf.londonstockexchange.com/rns/0027M_1-2010-5-16.pdf This information is provided by RNS The company news service from the London Stock Exchange END
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