Prudential 'firing on all cylinders'

UK-based insurance giant Prudential said today that businesses across the group were “firing on all cylinders” after reporting better-than-expected half-year figures.

The business currently employs some 6,000 staff located in offices in Dublin, Belfast, London, Stirling (in Scotland) and Mumbai (formerly Bombay, India).

The further evidence of the Pru’s recovery from the tough economic and regulatory conditions of the last two years came with a 55% rise in operating profits to £563m (€853.9m) and a 13% improvement in sales – based on the industry’s standard measure – to £853m (€1.3bn).

But the progress was offset by the lack of an update on the sale of the Pru’s 79% stake in internet bank Egg – a process that began at the start of the year and involved talks with several different parties.

Chief executive Jonathan Bloomer said discussions were continuing, adding that Prudential’s core businesses had “considerable opportunities” to grow.

In the UK, sales were up by 15% although a change in the company’s product mix hit margins and left new business profits only 2% higher at £88m (€133.5m).

Mr Bloomer said he now detected a more promising outlook for the UK after the uncertainty caused by a number of regulatory reviews had earlier unsettled investors. The changes had been one of the factors behind a sharp fall in annual group profits last year – down to £794m (€1.2bn) from £1.13bn (€1.7bn).

He added: “We believe we are now moving into a more positive phase, where the government has provided greater clarity on price caps and distribution, and there are some signs of returning consumer confidence.”

Mr Bloomer said work to strengthen distribution channels for the UK business was paying off with increased sales through intermediaries and other partnerships. New products have also been launched, including an investment bond known as the PruFund.

Overseas, the company said Prudential Corporation Asia was a “major force across the region”, with 23 businesses in 12 countries. In the first half of the year, new business profits grew by 23% on a year earlier, the Pru said.

In the United States, the company said Jackson National Life benefited from a strong product mix and distribution model as an “excellent” first half saw sales rise 9% and statutory operating profits by 50%.

Mr Bloomer added: “Our businesses across the group are firing on all cylinders and our markets in the UK, US and Asia present great opportunities for us.”