a7743x
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 April, 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-
NEWS RELEASE
28 April 2023
PRUDENTIAL PLC BUSINESS PERFORMANCE UPDATE
Prudential plc ('Prudential') provides a business performance
update for the first quarter ended 31 March 2023.
Performance highlights on a
constant1 (and
actual) exchange rate basis
●
APE sales2 were
up 35 per cent (29 per cent) to $1,559 million driven by increasing
cross border traffic from the Chinese Mainland and higher domestic
demand in Hong Kong alongside growth in many of our other business
units
●
New business profit3 was
up 30 per cent (26 per cent) to $743 million. Excluding economic
impacts4 new
business profit rose 43 per cent (39 per cent)
Financial update
"The strength of our distribution capabilities and the
diversification of the business across country, product and
channel contributed
to our performance in the first quarter. 10 out of the 13 life
insurance markets in Asia, as well as Africa, achieved double-digit
growth1 in
new business profit. A key theme of our growth has been the success
of new products as we continue to focus on meeting the diverse
needs of our customers.
"APE sales grew significantly when compared with the same period in
2022. Following the removal of the bulk of Covid-19-related
restrictions, our agency channel has seen continued momentum with
APE sales increasing every quarter since Q2 2022. APE sales through
the bancassurance channel reduced (by 4 per cent1)
following double-digit growth in the prior year. Total new business
profit for the Group grew by 30 per cent1 with
new business margin broadly stable at 48 per
cent.
"Hong Kong APE sales to both domestic customers and Chinese
Mainland visitors grew strongly, with sales to Chinese Mainland
visitors restarting following the reopening of the border with Hong
Kong. New business profit in Hong Kong increased by 106 per
cent1 to
$293 million on APE sales of $455 million, up 299 per
cent1.
As highlighted in our full year 2022 results announcement in March
2023, Hong Kong's new business profit margin in the first quarter
of 2023 of 64 per cent reflects a higher proportion of savings
products in our sales mix than in the prior period. This effect was
partially offset by the impact of lower interest rates at the end
of the first quarter compared with the end of
2022.
"CITIC Prudential Life's agency APE sales increased compared with
the same period in the prior year1.
As expected, APE sales through the bancassurance channel were lower
with management placing greater focus on product mix. Total new
business profit grew despite an overall fall in APE
sales.
"In our businesses based in South-east Asia5,
APE sales growth drove increases in new business profit in
Indonesia and our Growth markets segment, while both APE sales and
new business profit moderated in Singapore and Malaysia reflecting
changes in product and channel mix. Our South-east Asia businesses
represented 32 per cent of the total new business profit generated
in the quarter. Indonesia showed a continuation of the performance
seen in the fourth quarter of last year with growth in both agency
and bancassurance production1. The
Growth markets segment performed well especially in Thailand and in
the Philippines. ICICI Prudential Life has continued to deliver
growth in the first quarter, with double-digit broad-based growth
in APE sales and new business profit. It also announced that it had
met its objective of doubling its 2019 new business profit by
2023.
"Eastspring's funds under management increased to $228.6 billion at
the end of the first quarter of 2023 from $221.4
billion6 at
the end of 2022, with positive inflows from both the internal life
businesses and
retail third parties, and a net positive contribution from market
and other movements in the period. We have however seen
further redemptions
by M&G plc of $1.7 billion in the period and
anticipate a significant proportion of their remaining funds will
exit in 2023.
Outlook
"Business momentum, particularly in Hong Kong, has continued to
date in the second quarter and we maintain our prudent approach to
asset allocation and credit risk. We remain confident that we have
the financial resilience, capital strength and capabilities to meet
the growing health, protection and savings needs of our customers
in Asia and Africa. By doing so, we believe we will deliver on our
purpose to help people get the most out of life and also build
value for all our stakeholders over the long term."
Anil Wadhwani
Chief Executive Officer
Life EEV new business profit and APE new business sales (APE
sales)
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Actual exchange rate
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Constant exchange rate
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Q1 2023 $m
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Q1 2022 $m
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Change %
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Q1 2022 $m
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Change %
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|
APE sales
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New business profit
|
APE sales
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New business profit
|
APE sales
|
Newbusiness profit
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|
APE sales
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New business profit
|
APE sales
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New business profit
|
Total
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1,559
|
743
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1,212
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591
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29%
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26%
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1,154
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571
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35%
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30%
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Total new business margin (%)
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48%
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49%
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49%
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Notes
1.
Comparisons
are to the first three 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.
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 unaudited financial
information in Prudential's 2022 Annual Report for further
explanation.
3.
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 2022 Annual Report for further
explanation.
4.
Represents
the growth compared with the first quarter of 2022 if new business
profit for the first quarter of 2023 had been calculated using
economics (including interest rates) as at 31 March
2022.
5.
South-east
Asia comprises of our businesses in Asia excluding the Chinese
Mainland, Hong Kong, Taiwan and India.
6.
On
an actual exchange rate basis.
Contact:
Media
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Investors/analysts
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Simon Kutner
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+44 (0)7581 023260
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Patrick Bowes
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+852 9611 2981
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Jennifer Tear
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+65 8870 8754
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William Elderkin
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+44 (0)20 3977 9215
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Sonia Tsang
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+852 5580 7525
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Darwin Lam
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+852 2918 6348
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About Prudential plc
Prudential plc provides life and health insurance and asset
management in 24 markets across Asia and Africa. The business helps
people get the most out of life, by making healthcare affordable
and accessible and by promoting financial inclusion. Prudential
protects people's wealth, helps them grow their assets, and
empowers them to save for their goals. 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
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 quarter
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 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 quarter 2023 NBP contained in this
announcement is based on interest rates as at 31 March 2023. When
published, the half year 2023 results will contain NBP for both the
first quarter of 2023 and the second quarter of 2023 based on
interest rates as at 30 June 2023. As a result, the amounts for the
first quarter of 2023 NBP that will be presented in the half 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
reconciliations of APE sales and EEV shareholders equity for the
full year 2022 to the most directly comparable IFRS measures can be
found in the Group's 2022 Annual Report.
Forward-looking statements
This document 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, 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 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 macroeconomic impacts on
financial market volatility and global economic activity and
impacts on sales, claims, 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;
●
given
Prudential's designation as an Internationally Active Insurance
Group, the impact on Prudential of systemic risk and other group
supervision policy standards adopted by the International
Association of Insurance Supervisors;
●
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 2022 Annual Report and its
Annual Report on Form 20-F filed with the US Securities and
Exchange Commission on 23 March 2023.
Any forward-looking statements contained in this document 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 document 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 2022 Annual Report
and any subsequent filing Prudential makes with the US Securities
and Exchange Commission, including any subsequent Annual Report on
Form 20-F.
Cautionary statements
This document 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: 28 April
2023
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PRUDENTIAL
PUBLIC LIMITED COMPANY
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By:
/s/James Turner
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James
Turner
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Group
CFO
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