Prudential plc 2011 Full Year Results - Asia drives profitable growth and cash

London - 13 March 2012

IFRS:

  • Operating profit of £2,070 million, up 7 per cent
  • Asia life insurance business operating profit1 of £709 million, up 32 per cent, for the first time the largest contributor2 to Group operating profit
  • Total profit before tax3 of £1,943 million, up 33 per cent
  • Shareholders' funds of £9.1 billion, up 14 per cent

New Business:

  • EEV new business profit of £2,151 million, up 6 per cent
  • Asia EEV new business profit of £1,056 million, up 22 per cent (excluding India)

Embedded Value:

  • Operating profit of £3,978 million, up 8 per cent
  • Asia life insurance business operating profit1 of £1,764 million, up 22 per cent
  • Shareholders' funds of £19.6 billion, up 8 per cent, equivalent to 771 pence per share

Capital & Dividend:

  • Underlying free surplus generation4 up 16 per cent to £1,983 million
  • Net remittances from business operations up 18 per cent to £1,105 million; Asia net cash remittance of £206 million
  • Insurance Groups Directive (IGD) capital surplus estimated at £4.0 billion; solvency requirements covered 2.75 times
  • Investment in new business of £553 million, a decrease of 14 per cent
  • 2011 full year dividend increased by 5.6 per cent to 25.19 pence per share, from the new higher base established at full year 2010
  • Minimal direct exposure to PIIGS5 sovereign and bank debt

Commenting on the results, Tidjane Thiam, Group Chief Executive, said:

"Prudential has delivered another strong performance in 2011 led by Asia, where our life insurance business1 for the first time became the single largest contributor2 to our Group IFRS operating profit. Since 2008, Asia's contribution to this benchmark profit measure has almost trebled from £257 million to £709 million.

"As a Group, we have continued to grow across our key metrics of IFRS, new business profit and cash while maintaining a robust capital position. This performance has been achieved against both a more challenging global economy in 2011 and the demanding comparator of 2010, our best year ever until now. In line with our strategy of value optimisation and capital conservation, higher sales and higher profit in 2011 have been achieved while consuming less capital in both relative and absolute terms than in 2010.

"The heart of our strategy remains Asia, where our positive momentum has been maintained in 2011, with total IFRS operating profit up 30 per cent and a cash remittance to the Group of £206 million. Asia is generating both growth and cash and our focus on the fast-growing markets of South-East Asia continues to pay off. In the US, Jackson is one of the leading providers of variable annuities in the world's largest retirement market. Compared to 2010, we have continued to grow our sales profitably while increasing cash generation, with new business profit up 7 per cent and new business margin at a level significantly above historic levels. In the UK, we continued to focus on value over volume and on increased IFRS operating profit. In asset management, both M&G and our business in Asia have seen continued net inflows and record IFRS operating profit.

"We remain on track to deliver the 2013 profit growth and cash generation objectives we announced in December 2010. In this uncertain macroeconomic environment, our clear strategy and the strength of our products and distribution – combined with our balanced portfolio of businesses and market-leading positions in Asia – mean we are well positioned to deliver continued relative outperformance in the medium-term."

1 Excluding Eastspring Investments, development costs and Asia regional head office expenses.

2 If long-term business is considered separately from asset management and UK general insurance commission.

3 Attributable to shareholders.

4 Free surplus generated from in-force business net of amounts invested in new business.

5 Portugal, Italy, Ireland, Greece, Spain

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