Shares of Prudential (LSE: PRU) increased by 2% in early trade, after the insurer revealed a 17% rise in operating profit to £1.5bn. This is despite challenging macroeconomic conditions in South-East Asia and disruption to the UK pension market, which saw sales of annuities plummet following the 2014 Budget.
Prudential’s US life business, Jackson, saw operating profit surge 28% to £686m (at constant exchange rates), primarily driven by higher fee income. The Asia life business, meanwhile, delivered delivered a 19% upswing in operating profit, underpinned by strong performance in the group’s ‘sweet spot’ markets such as Indonesia, Singapore, Hong Kong and Malaysia.
In the UK operating profit climbed 10% to £374m, “a strong performance in a market undergoing significant regulatory change,” Prudential said. Retirees no longer have to purchase an annuity to convert their pension savings into a regular income and Prudential is focused on developing products “to meet customers’ ever evolving needs”.
The interim dividend was raised 15% to 11.2p per share, calculated as one third of the prior year’s full year dividend (33.6p). Prudential’s strategy remains focused on cash-generative growth from its diverse geographic, product and market segments.
“We remain confident in our ability to produce profitable growth over the long term and continue to create value for our customers and shareholders,” the chief executive, Tidjane Thiam, commented.
