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The Pru raises its dividend as boss departs

INSURER Prudential outpaced its rivals yesterday when it raised its interim dividend and reported a smaller-than-expected drop in first-half profit.<br /><br />The UK&rsquo;s largest insurer said its operating profit fell eight per cent to &pound;1.25bn on the widely recognised European embedded value measure (EEV) &ndash; which tracks future earnings from life insurance policies &ndash; compared to consensus of &pound;1.16m.<br /><br />&ldquo;These results demonstrate a continuing strong performance in what everyone knows have been exceptionally challenging conditions,&rdquo; said outgoing chief executive Mark Tucker.<br /><br />He added that Prudential&rsquo;s EEV new business profit had risen by 25 per cent to &pound;691m, thanks to its strategy of pursuing &ldquo;value over volume&rdquo;.<br /><br />The firm said that it would increase its interim dividend payment by five per cent to 6.29p per share, a rise that was driven by a doubling of its surplus capital to &pound;3bn at the end of July.<br /><br />This is in contrast with rivals Aviva and Legal &amp; General, who last week cut shareholder payouts to save cash.<br /><br />Tucker played down speculation that Prudential could sell its UK business, saying that it had &ldquo;performed very well in terms of cash delivery&rdquo; and is an important part of the insurer&rsquo;s overall business.<br /><br />Tucker will step down as chief executive in October, when he will be replaced by current chief financial officer Tidjane Thiam.<br /><br /><strong>TIDJANE THIAM<br />INCOMING CHIEF EXECUTIVE,<br />PRUDENTIAL</strong><br /><br />Currently the Pru&rsquo;s chief financial officer, Ivory Coast-born Thiam will step into Mark Tucker&rsquo;s shoes in October. The Insead graduate began his career with McKinsey in London and Paris, after which he returned to the Ivory Coast and joined the government. Following a military coup, he returned to McKinsey, followed by a six-year spell with Aviva.