Prudential profits up by a fifth as cash coffers swell to £12.8bn

 
Oliver Gill
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Prudential will hold an investor day in London today (Source: Getty)

Insurance giant Prudential wowed investors ahead of its annual conference this morning, as new business profits swelled by almost a fifth.

Asian operations, the largest and most profitable of Pru’s three main divisions, saw profits rise by 15 per cent to £1.4bn in the nine months to September.

In the UK and Europe, where the division was recently merged with the insurer’s fund management arm M&G, profits were up 31 per cent to £179m. Net inflows into M&G from outside the wider group have risen by £9.9bn in the first nine months of the year.

Chief executive Mike Wells said Prudential was continuing to capitalise on a rapidly expanding middle class in Asia. Bringing together the firm’s life assurance and fund management arms in the UK and Europe had given the firm an “opportunity” on which to focus, he added.

Read more: M&G Prudential is born: Insurer announces European shake-up

Cash

Prudential is sat on £12.8bn of cash over and above what it needs to set aside for regulatory purposes. This means the firm's Solvency II ratio – how much cash insurers have to cover risks – stands at 201 per cent. This is projected to nose down to £12.5bn by the end of the year.

The insurer’s third arm, in the US, where it operates under the Jackson brand, saw profits rise 17 per cent to £529m.

Total group sales were £4.8bn, generating a profit of £2.1bn for the year-to-date, up 17 per cent on 2016.

Prudential will today hold an investor day at the Intercontinental Park Lane Hotel in London. Wells said the presentations the firm had lined up would “demonstrate the strength” of the FTSE 100 firm while also giving insight into how Prudential can “respond with pace to new opportunities”.

Read more: Prudential to split £10bn UK annuities book into four saleable chunks

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