Pru gets lift from higher sales in Asia

INSURANCE giant Prudential yesterday said its sales grew on the back of growing momentum in its Asian business.

The insurer, which was forced to back out of a $35.5bn bid for AIG’s Asian insurance unit AIA earlier this year, said yesterday total group sales rose 24 per cent to £2.4bn in the first nine months of the year. The company reported new business profit of £1.3bn for the first nine months of 2010, up from £1.1bn last year and in line with expectations.

Group sales for the third quarter alone were £809m compared to £689m last year an increase of 17 per cent. The Pru’s Asian unit contributed a significant amount to total net business profit, adding 46 per cent of the total with Asian net business profit up 34 per cent to £621m for the year to date compared to £465m a year earlier.

Sales for the year so far were up 32 per cent to £1.06bn while sales for the third quarter were £533m, up 25 per cent on the previous year ?– the highest sales figure for the Asian business in the third quarter to date.

In the UK, now the smallest slice of the insurer’s business, it said it was focused on a strategy of writing new business with sustainable cash generation and capital preservation. Total sales were up three per cent to £548m for the first nine months compared to £282m a year earlier. Net business profit grew 14 per cent year to date to £192m from £169m a year earlier.

Tidjane Thiam, group chief executive, said Prudential remained well positioned to deliver strong growth and generate strong returns for shareholders.

“South East Asia, with its high rates of GDP growth, saving habits and low penetration of insurance products, remains the most attractive long-term opportunity in our industry and the primary focus for our growth and investment,” Thiam added.

ANALYST VIEWS: what do you make of prudential’s latest results?

Another terrific set of new business figures from Prudential which is undervalued, especially when the rating of the newly-floated AIA in Asia is factored in.

The latest results show the success of Prudential’s strategy of focusing on value over volume, and capitalising on the most profitable growth opportunities.

This is a straightforward set of figures and helps reinforce the strength of the group, despite the AIA loss, the company is still delivering in spades.