Shares in Asia and Africa-focused insurer Prudential (PRU) topped the FTSE 100 leader board with a gain of 4% to £10.26 after the firm posted better-than-expected first half results and revealed some of the key points of newly-installed chief executive Anil Wadhwani’s strategic plan.

STRONG FIRST-HALF TRADING

The group reported a 39% increase in new business profit to $1.49 billion with double-digit growth in 16 of its life insurance markets.

APE or annual premium equivalent sales were up 42% to just over $3 billion, beating the consensus by 3% or around $100 million.

EEV operating profit, which is based on longer-term investment returns and excludes the effect of changes in economic assumptions and mark-to-market movements on core borrowings, rose 22% to $2.15 billion.

The group raised its first interim dividend by 9% to 6.26 cents per share and guided for an annual increase of between 7% and 9% for this year and next year.

Insurance analysts at Jefferies, led by Philip Kett, flagged the firm’s ‘standout’ performance in Hong Kong with sales to mainland Chinese visitors up more than 100-fold giving Prudential a 27% share of the market and putting it in pole position.

‘Domestic (Chinese) momentum also surprised us, with APE up 68% with 7% market share,’ added Kett. Given strong competition from peers such as HSBC (HSBA) and Canada’s Manulife, ‘this is especially reassuring’ according to the team.

NEW TARGETS

The first-half update also included chief executive Anil Wadhwani’s new strategy following the completion of his operational review, with a focus on productivity, more consistent execution across its markets and greater free surplus generation to allow the group to invest in new business as well as return capital to shareholders.

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Wadwhani set out two key financial objectives for the period from 2022 to 2027 – to increase new business profit at a compound annual growth rate of between 15% and 20%, and to increase the operating free surplus generated by in-force insurance and the asset management business by double-digit rates annually.

In terms of the outlook, the firm said: ‘Consumers in Asia remain resilient despite the challenging environment. While the outlook for Asian markets is mixed, our momentum in the first half has continued into the third quarter. This underscores the strength of our multi-market growth engine backed by our diversified channel mix, which is key to driving sustainable value in the long term.’

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