Pru profits up as US and Asia demand soars

BURGEONING sales in the US and Asia pushed Prudential’s profits up 17 per cent in the first-quarter of 2011, it said yesterday.

New business profits at the life insurance and pensions giant rose to £498m from £427m in the first-quarter of 2010 while new business sales increased by ten per cent to £888m.

Higher-than-expected demand for variable annuities in the US and double-digit sales in nine Asian markets drove the growth, it said in its interim management statement.

The results beat consensus market expectations for £456m in new business profit and sales revenues of £854m. Jackson National, its US business, saw revenues jump 26 per cent to £322m in the quarter as retirees snapped up more variable annuities.

“The retiring ‘baby boomers’ have a strong appetite for protection,” chief executive Tidjane Thiam said – but admitted that the growth may have to be reined in to prevent the business from becoming too large.

“We will continue to closely monitor developments in this market with a clear focus on profitability rather than market share,” he said.

Prudential’s Asia performance was held back by India, where stringent new regulation caused sales to fall 58 per cent and slowed the region’s sales growth to just two per cent.

Excluding India, Asian sales were up 17 per cent, led by Singapore where they rose 42 per cent. UK sales were £199m, a three per cent rise on 2010.