Prudential warns of 'volatile' UK trading

Insurance giant Prudential today posted a better-than-expected hike in first quarter sales, but showed signs that the economic turmoil was starting to bite as new business slipped 19% on the final three months of 2007.

The group reported group-wide insurance sales of £729m (€901m) for the three months to March 31, up 13% year-on-year.

Prudential saw sales of £189m (€233m) at its UK arm, up 4% on the same period last year, while its Asian business continued to outshine its domestic operations, with sales up 30% on an annual basis at £375m (€463m).

However, even the fast-growing business in Asia showed signs that it was feeling the heat from the tough trading conditions, with quarterly performance rising at a more muted 2%.

And the UK business dived 49% on the fourth quarter of 2007 as Prudential described conditions as uncertain and volatile.

Mark Tucker, group chief executive, said: “The current economic environment is challenging but I am confident that our geographic diversity, advantaged distribution, product expertise and management capability position us well for future growth.”

He added the group’s prospects for 2008 remained “positive”.