The strength in Asia was offset by weak US growth of 3% but bolsterd by a 23% rise in UK sales.
Annual premium equivalent (APE) sales in Asia rose to £2.9bn ($4.1bn, €3.7bn); driven by a 74% increase in Hong Kong, which saw an acceleration in demand from customers from mainland China.
Prudential’s joint venture in China also reported strong growth, up 28%, although the second half of the year was marked by significantly higher levels of investment market volatility.
Singapore and Indonesia weighed on the company’s results, reporting APE declines of 13% and 11%, respectively.
“After a period of exceptional growth, M&G had a more challenging year with retail net outflows more than offsetting positive flows from institutional new business.”
Elsewhere, Malaysia saw overall APE sales growth of 17%, while Filipino APE rose by 9% compared with a year ago. Thailand’s sales were up 32% and Prudential’s green field operations in Cambodia continued to move ahead with sales growth of 167%.
“In Asia, our portfolio of businesses remains focused on serving the protection and investment needs of the growing middle class in the region,” said Mike Wells, group chief executive of Prudential.
Eastspring Investments
“Eastspring, our Asian asset management business, achieved record third-party net inflows of £6bn, driving its total funds under management to a new high of £89.1bn,” said Wells.
The asset management business benefited from robust inflows into equity funds; including Asian equity funds in Japan, good investment performance in Korea and India driving excellent domestic flows, as well as healthy net inflows into bond funds from the company’s joint ventures in China and India.
UK & Europe
In 2015, total APE sales in the UK and Europe rose by 23% to £1bn. Prudential’s retail business achieved sales growth of 32% to £874m, driven by growing demand for savings and retirement products; specifically the PruFund range, which generated sales of £73m with assets under management totalling £674m at the end of December 2015.
Retail new business profit increased by 31% benefiting from increased sales volumes but was partially offset by a lower contribution from individual annuity sales. APE sales of individual annuities decreased by 46% from 2014 levels to £57m and now represent 7% of retail sales.
Onshore bonds APE sales of £258m increased by 11%, while offshore bonds sales rose by 21% to £75m over the previous year. Reflecting increased demand for a wider range of retirement solutions post-pension reforms, income drawdown APE sales almost trebled to £102m and individual pensions APE sales more than doubled to £150m compared to 2014.
M&G Investments
Wells said: “After a period of exceptional growth, M&G had a more challenging year with retail net outflows more than offsetting positive flows from institutional new business.”
At the end of 2015, global funds group M&G’s total funds under management dipped by 7% to £246.1bn (2014: £264bn), with external funds under management of £126.4bn accounting for 51% of the total compared with 45% five years ago.
Retail funds under management at the end of 2015 were 18% lower at £60.8bn (2014: £74.3bn).
Despite the outflows, M&G’s total funds under management are still 24% higher than they were at the end of 2010 when they were £198.3bn.
United States
Prudential’s US business, Jackson, delivered total retail APE sales of £1.6bn in 2015, broadly consistent with 2014. Including institutional sales, total APE sales increased 3% to £1.7bn.
Africa
During 2015 Prudential continued to develop its Sub-Sahara Africa business. The company entered the Uganda insurance market through the acquisition of Goldstar Life Assurance in June 2015 and established bank distribution agreements with Societe Generale and Fidelity Bank in Ghana, and with Standard Chartered in Kenya.
In January 2016, it announced entry into Zambia via the acquisition of Professional Life Assurance. Once regulatory approval is received for the Zambia acquisition, Prudential’s footprint in Africa will have expanded to four countries with access to nearly 1,300 agents and 200 bank branches.
Forward look
Wells concluded: “We have delivered a strong performance in 2015. We continue to grow across our key metrics despite the macroeconomic uncertainty and the challenges presented by low long-term interest rates.
“The fundamentals of the group remain compelling, our opportunities are intact and we are in an enviable position to benefit from the attractive structural and demographic opportunities in Asia, the US, and the UK.”
