Prudential reports better than expected profit

City A.M. Reporter
Insurer Prudential has reported better-than-expected first-quarter profit after a strong performance in its key Asian markets helped it offset a previously flagged downturn in India.

Prudential, Britain's biggest insurer, said it made a new business profit of 498 million pounds in the first three months, up 17 per cent from a year earlier.

Analysts had expected a profit of £456m, according to the company's calculation of consensus expectations.

The increase came as overall sales rose 10 per cent to £888m, beating the £854m pencilled in by analysts, as strong growth in south-east Asia outweighed a downturn in India, after regulators there capped charges on some life insurance products.

Prudential warned in November that sales in India would suffer as it and other insurers redesigned their products to conform to the new charging structure.

Prudential has been focussing on fast-growing Asia to offset stagnant growth at home, and generated 43 percent of its sales in the region last year.

An ambitious $35.5bn bid by Prudential for Asian rival AIA came unstuck last year after investors baulked at the price, leaving the Pru to shoulder £377m in costs and prompting calls for chief executive Tidjane Thiam to quit.

The 163-year old insurer has since sworn off big acquisitions, hiked its dividend, and set out stretching cash generation and profit targets in an effort to mollify irate investors.