We do life.

Prudential helps people de-risk their lives and deal with their biggest financial concerns.

Group Chief Executive

Mike Wells
Group Chief Executive

Capturing the structural opportunities ahead of us

I am pleased to report that we have delivered another year of positive financial performance across the Group. Through the combination of our consistent strategy, our diversified portfolio of businesses and our disciplined execution, we have continued to produce high-quality earnings and deliver consistent returns for our investors and good outcomes for all our stakeholders.

Chief Financial Officer

Mark FitzPatrick
Chief Financial Officer

Positive financial performance demonstrating our focus on implementing our strategy

I am pleased to report that Prudential’s financial performance in 2018 reflects our strategic focus on driving growth in high-quality, recurring health and protection and fee business across our geographies, products and distribution channels.

Prudential plc

We meet the long-term savings and protection needs of a growing middle-class and ageing population. We focus on markets where the need for our products is strong and growing and we use our capabilities, footprint and scale to meet that need.

In 2018 the Group announced its intention to demerge its UK and Europe business, M&GPrudential, from Prudential plc, which will result in two separately listed companies, with different investment characteristics and opportunities. We have always been clear about the importance of creating optionality in our corporate structure, and decided to exercise one of those options in the interests of both the business and all of our stakeholders.

£657bn

total funds under management

26m

customers worldwide

49.35p

full-year ordinary dividend

Asia

Prudential Corporation Asia

Leading pan-regional franchise

 


£151bn

assets under management

94%

of APE sales are regular premium

£1.2bn

underlying free surplus generation

United States

United States

Premier retirement income player

 


US$163bn

separate account assets

US$2.2bn

variable annuity net inflows

£2.4bn

fee income

M&GPrudential

M&GPrudential

Long-term conviction-led investment approach

 


£43bn

total PruFund funds under management

29

operating markets

£321bn

total M&GPrudential funds under management

Demerger update

Demerger update

We are aiming to create two separately listed companies with distinct investment prospects, capital allocation priorities and customer needs.

 

 

Chief Executive Officer: Mike Wells
Headquarters: London
Premium listing: London Stock Exchange
Other listings: Hong Kong (Primary), Singapore, New York

Prudential plc will continue to combine the exciting growth potential of our Asia, US and Africa businesses, as a leading international insurance and asset management group. We will also remain headquartered and premium listed in London.

 

 

Chief Executive Officer: John Foley
Headquarters: London
Premium listing (intended): London Stock Exchange

M&GPrudential, one of the leading savings and investments businesses in the UK and Europe, will be an independent, capital-efficient business, headquartered and premium-listed in London.

What is the rationale for the demerger?
Following separation, M&GPrudential will have more control over its business strategy and capital allocation. This will enable it to play a greater role in developing the savings and retirement markets in the UK and Europe through two of the financial sector’s most trusted brands, M&G and Prudential, while Prudential plc will be able to focus on the attractive returns and growth potential of its market-leading businesses in Asia and the US.

Will the businesses stay in the UK?
Both businesses will be headquartered in the UK, and premium-listed on the London Stock Exchange. We expect both businesses will meet the criteria for inclusion in the FTSE 100 index.

How are we progressing?
In preparation for the demerger, we have already completed a number of key steps, including:

  • We announced that the Hong Kong Insurance Authority would be the Group-wide supervisor after the demerger of M&GPrudential;
  • We raised £1.6 billion of debt in September 2018. This debt issuance contained a substitution clause, allowing us to substitute M&GPrudential for Prudential plc as the issuer;
  • We established a new holding company for M&GPrudential and completed the transfer of the legal ownership of The Prudential Assurance Company Limited and M&G Group Limited to this company;
  • We announced the independent Chair of M&GPrudential in October 2018; and
  • We completed the transfer of the legal ownership of our Hong Kong insurance subsidiaries from The Prudential Assurance Company Limited (M&GPrudential’s UK-regulated insurance entity) to Prudential Corporation Asia Limited.

When will it happen?We are making good progress on the workstreams to enable the legal, operational and financial separation of the businesses and we are committed to delivery with best execution. We will provide more details on timing when it is appropriate to do so.

What will happen to your shares? Shareholders will retain their shares in Prudential plc and, if the demerger completes, receive shares in a separately listed M&GPrudential.

Prudential plc

We meet the long-term savings and protection needs of a growing middle-class and ageing population. We focus on markets where the need for our products is strong and growing and we use our capabilities, footprint and scale to meet that need.

In 2018 the Group announced its intention to demerge its UK and Europe business, M&GPrudential, from Prudential plc, which will result in two separately listed companies, with different investment characteristics and opportunities. We have always been clear about the importance of creating optionality in our corporate structure, and decided to exercise one of those options in the interests of both the business and all of our stakeholders.

£657bn

total funds under management

26m

customers worldwide

49.35p

full-year ordinary dividend

 

Asia

Prudential Corporation Asia

Leading pan-regional franchise


£151bn

assets under management

94%

of APE sales are regular premium

£1.2bn

underlying free surplus generation

United States

United States

Premier retirement income player


US$163bn

separate account assets

US$2.2bn

variable annuity net inflows

£2.4bn

fee income

M&GPrudential

M&GPrudential

Long-term conviction-led investment approach


£43bn

total PruFund funds under management

29

operating markets

£321bn

total M&GPrudential funds under management

Demerger update

We are aiming to create two separately listed companies with distinct investment prospects, capital allocation priorities and customer needs.

Chief Executive Officer: Mike Wells
Headquarters: London
Premium listing: London Stock Exchange
Other listings: Hong Kong (Primary), Singapore, New York

Prudential plc will continue to combine the exciting growth potential of our Asia, US and Africa businesses, as a leading international insurance and asset management group. We will also remain headquartered and premium listed in London.

Chief Executive Officer: John Foley
Headquarters: London
Premium listing (intended): London Stock Exchange

M&GPrudential, one of the leading savings and investments businesses in the UK and Europe, will be an independent, capital-efficient business, headquartered and premium-listed in London.

 

What is the rationale for the demerger?
Following separation, M&GPrudential will have more control over its business strategy and capital allocation. This will enable it to play a greater role in developing the savings and retirement markets in the UK and Europe through two of the financial sector’s most trusted brands, M&G and Prudential, while Prudential plc will be able to focus on the attractive returns and growth potential of its market-leading businesses in Asia and the US.

Will the businesses stay in the UK?
Both businesses will be headquartered in the UK, and premium-listed on the London Stock Exchange. We expect both businesses will meet the criteria for inclusion in the FTSE 100 index.

How are we progressing?
In preparation for the demerger, we have already completed a number of key steps, including:

  • We announced that the Hong Kong Insurance Authority would be the Group-wide supervisor after the demerger of M&GPrudential;
  • We raised £1.6 billion of debt in September 2018. This debt issuance contained a substitution clause, allowing us to substitute M&GPrudential for Prudential plc as the issuer;
  • We established a new holding company for M&GPrudential and completed the transfer of the legal ownership of The Prudential Assurance Company Limited and M&G Group Limited to this company;
  • We announced the independent Chair of M&GPrudential in October 2018; and
  • We completed the transfer of the legal ownership of our Hong Kong insurance subsidiaries from The Prudential Assurance Company Limited (M&GPrudential’s UK-regulated insurance entity) to Prudential Corporation Asia Limited.

When will it happen?
We are making good progress on the workstreams to enable the legal, operational and financial separation of the businesses and we are committed to delivery with best execution. We will provide more details on timing when it is appropriate to do so.

What will happen to your shares?
Shareholders will retain their shares in Prudential plc and, if the demerger completes, receive shares in a separately listed M&GPrudential.

Our performance

Growth

£4,827m

Operating profit

+6% on 2017

Growth rates on a constant exchange rate basis.

Growth

£3,877m

New business profit

+11% on 2017

Growth rates on a constant exchange rate basis.

Growth

£7,563m

EEV operating profit

+19% on 2017

Growth rates on a constant exchange rate basis.

Cash

£4,047m

Free surplus generation

+14% on 2017

Growth rates on a constant exchange rate basis.

Cash

£1,732m

Remittances

-3% on 2017

Growth rates on an actual exchange rate basis.

Capital

£17.2bn

Solvency II surplus

+29% on 2017

Growth rates on an actual exchange rate basis.

Capital

232%

Solvency II cover ratio

+30pp on 2017

 

Corporate responsibility review

A long-term view

We recognise the importance of providing benefits to all our stakeholders, whether through our community investment programmes, our environmental impact, our engagement and talent development with our colleagues or our approach to responsible investment.

 

 

2018 performance highlights


£27.3m

total community investment

117,491

hours volunteered by employees across the Prudential Group

£479,633

donated by employees through payroll giving across the Group