[SINGAPORE] Prudential reported a 2 per cent decline in new business profit to US$3.08 billion for the financial year ended December, from US$3.1 billion in the prior year.
On a constant exchange rate basis, the new business profit would have been up 11 per cent.
In its financial results released on Thursday (Mar 20), Prudential noted that 14 markets achieved double-digit year-on-year growth in new business profit, led by Hong Kong, Singapore and Taiwan.
In Singapore, new business profit for FY2024 grew 15 per cent, underpinned by an 11 per cent increase in annual premium equivalent (APE) sales.
The Asia-focused insurer further highlighted new business profit growth in 18 of its 22 life markets.
It noted that the growth in new business profit comes after the reopening of the border with the Chinese mainland in 2023.
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This growth is also supported by a 7 per cent rise in APE sales and margin expansion.
The new business profit for the health segment grew 11 per cent to US$346 million. This was led by growth in Hong Kong, Singapore and Indonesia, and comes on the back of new healthcare products, repricing initiatives, as well as further training and enablement of the insurer’s agency force.
The agency channel delivered new business profit of US$1.9 billion, consistent with the prior year’s performance.
Bancassurance new business profit rose 31 per cent to US$872 million, supported by sales growth and positive product mix effects.
Overall, profit for FY2024 rose 41 per cent to US$2.4 billion, from US$1.7 billion in FY2023. On a constant exchange rate basis, profit would have been up 43 per cent.
The group’s directors approved a second interim dividend of US$0.1629 per share. This brought its full-year dividend to US$0.2313 per share, up 13 per cent compared with FY2023.
As at Mar 14, Prudential completed US$1 billion in share buybacks under its US$2 billion share buyback programme announced in June last year.
“This programme is now expected to complete by the end of 2025 rather than our original guidance of mid-2026,” it noted.
Commenting on the results, chief executive Anil Wadhwani pointed out that the long-term growth trends inherent in Asia and Africa are reasserting themselves, creating significant opportunities for the insurer.
He added: “Insurance penetration rates in Asia are low and there is continued, and growing, demand for long-term savings and protection products across our markets, alongside a need for wealth management and retirement planning, particularly in our higher income Asian markets.”
The insurer remains confident of achieving its 2027 objectives. The two financial objectives are to grow new business profit at a compound annual growth rate of 15 to 20 per cent from the level achieved in 2022; and to deliver at least US$4.4 billion in operating free surplus generated from in-force insurance and asset management business.
In February, Prudential said it is evaluating a potential listing of its Indian joint venture, ICICI Prudential Asset Management, which will involve the partial sale of its shares. The transaction is subject to market conditions, requisite approvals and other considerations.
If the deal goes through, net proceeds from the divestment will be returned to shareholders.
The insurer intends to update shareholders on its capital management plans when it announces results for the half-year period in August.
Joint venture in India
In a separate announcement on Thursday, Prudential announced its plan to establish a joint venture with India’s HCL Group’s promoter company Vama Sundari Investments (Delhi), to operate a standalone health insurance business.
Prudential will hold a 70 per cent stake in the joint venture, while Vama will hold the remaining 30 per cent. The joint venture is subject to obtaining regulatory approvals.
It aims to address the growing healthcare needs of the Indian consumer, and contribute to the Indian government’s vision of having “Insurance for All by 2047”.
Wadhwani said: “India’s growing economy, population and middle class create significant opportunities for growth in its insurance market, especially in the health, savings, protection and retirement sectors.”
Shikhar Malhotra, executive director of Vama, noted that the partnership leverages mutual synergies. “Through this collaboration, we aim to advance our common mission to enhance access to quality health insurance and drive greater penetration across the country.”
The joint venture company is expected to be led by industry veteran Amar Joshi.
Shares of Prudential ended Wednesday flat at US$8.21 on the Singapore Exchange.
