Prudential sees 11% YoY rise in Q1'24 new business profit

APE sales increased by 7% YoY to $1.6b.

Prudential’s first quarter (Q1’24) new business profit yielded an 11% year-on-year (YoY) climb, reaching $810m when excluding economic impacts. 

However, when considering economic impacts, new business profit remained relatively stable at $726m.

The period’s annual premium equivalent (APE) sales saw a 7% YoY increase, reaching $1.6b. 

Despite facing strong comparators in Hong Kong and CPL and encountering headwinds in Vietnam, the business demonstrated continued momentum. In Hong Kong, total APE sales witnessed a modest 1% YoY growth, reflecting a sustained recovery since Q1’23. 

Both domestic and Chinese Mainland visitor segments contributed to this growth, with agency and bancassurance sales maintaining consistency compared to the latter half of 2023.

Notably, new business margins saw a YoY increase, reaching 69%, supported by a 16% YoY surge in health and protection APE sales.

Meanwhile, CITIC Prudential Life (CPL), Prudential's joint venture in mainland China, experienced a 17% YoY decline in APE sales year-on-year. 

However, sales in the first quarter of 2024 surpassed the total for the previous six months of 2023, emphasising the company's focus on its long-term savings and protection products. 

CPL's focus on product optimisation led to a 4-percentage-point increase in new business margins, maintaining consistency with full-year 2023 margins.

Singapore witnessed a continued sales momentum, with APE sales rising by 2% YoY compared to Q1’23, accompanied by a 2-percentage-point improvement in new business margins. This trend contributed to an overall increase in new business profit.

In Malaysia, Prudential reported impressive APE growth of 29% YoY, primarily driven by a 50% YoY surge in bancassurance sales, supported by strategic partnerships, particularly with UOB. 

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Despite a decline in new business margins due to the higher proportion of bancassurance sales, increased APE sales contributed to higher new business profit.

Conversely, Indonesia experienced a 10% YoY decline in APE sales compared to Q1’23, attributed to regulatory actions on investment-linked products. 

However, significant growth in bancassurance sales mitigated this decline. Lower APE sales impacted new business profit, prompting ongoing transformation efforts to enhance productivity and profitability.

The "growth markets and other" segment saw a robust 28% YoY increase in APE sales, driven by strong performances in Thailand, Taiwan, India, and Africa. 

Though new business margins declined due to business mix effects, overall new business profit surged, underscoring the segment's growth potential.

Eastspring, Prudential's asset management arm, witnessed growth in funds under management or advice, reaching $239b by the end of March 2024. 

Strong net inflows from the Group's insurance business, coupled with inflows from third parties, contributed to this growth, despite outflows from the institutional business.