Prudential Shares Fall Fractionally As Growth Slows In Q3

Life insurance giant Prudential’s share price was largely unchanged on Monday despite signs of slowing sales and profits during the third quarter.

At 896.4p per share, the FTSE 100 company was last dealing 0.3% lower in start-of-week trading.

Prudential announced that annual premium equivalent (APE) sales were up 40% during the first nine months of September, at $4.4 billion. This was driven by strength in Hong Kong, it said, where sales to domestic customers and those from the Chinese mainland increased.

However, sales growth was down from 42% during the first half, suggesting a decelertation in customer demand in quarter three.

In China, ‘The Pru’ said that “the industry-wide changes in both product and bancassurance distribution regulations and our pro-active actions to diversify product mix are leading to some disruption in sales.”

Margins Improve

Prudential’s new business profit rose 37% between January and September, to $2.1 billion. This was lower than the 39% increase posted at the halfway point of 2023.

But Prudential’s new business margin came in at 49% for the nine months, improving from 43% during the first half of the year.

This was thanks to “positive developments in channel and geographic mix,” the firm said. It added that “health and protection sales contributed to more than a third of the new business profit with growth in both the agency and bancassurance channels.”

Sales Growing

Chief executive Anil Wadhwani commented that “the new business momentum we saw in the first half of 2023 continued in the third quarter,” adding that “the strength of our distribution capabilities and the diversification of the business across markets, products and channels drove our performance.”

He noted that 15 of its Asian and African life markets enjoyed double-digit growth in new business profit during the first nine months of 2023.

Looking ahead, Prudential said that “our diversified business model and strong capitalisation positions us well to navigate ongoing challenges in the macro-economic and geopolitical environment.”

It added that “the environment continues to be challenging but new business momentum has continued into the fourth quarter supported by our multi-market growth engine.”

Royston Wild owns shares in Prudential