Shares in Asian focused insurance company Prudential (PRU) jumped 6% following better than expected full-year results. However, the lack of any news on the appointment of a new chief executive is disappointing.
Adjusted operating profit of $3.23 billion was ahead of the prior year figure of $2.75 billion, beating the $3.19 billion consensus of analysts’ forecasts.
New business profit rose 15% to $2.5 billion in the year to 31 December, up from $2.2 billion in 2020. Gross premiums for 2021 were marginally higher than in 2020, up from $23.4 billion to $24.2 billion. The dividend of $0.1723 is ahead of a consensus estimate of $0.1713.
ASIA CALLING
Current Prudential CEO Mike Wells is leaving the company by the end of March. His replacement will be based in Asia.
This decision is indicative of the group’s broader strategic pivot to the East and was highlighted last October when it raised $2.4 billion in an Asian equity issue.
This followed the demerger of Prudential’s UK operation M&G in 2019, and its US based Jackson Life annuity business last year.
The demerger of Jackson Life has transformed Prudential from being an incongruous growth/value hybrid into a pure growth play driven by a growing Asian middle class, and the associated demand for savings and insurance products.
Prudential has a unique and leading position in fast-growing and increasingly affluent Asian markets, where it focuses on savings and health and protection products, supported by a leading agency and bancassurance (the term for when banks sell insurance products) distribution network.
However, new business levels in Hong Kong, its Asia headquarters, continued to face pressure from the extended mainland China border closure in 2021.
‘The timing of the opening of the Hong Kong border remains uncertain and COVID-19 will continue to have an impact,’ said Wells.
