The results underscore the challenge to maintain Prudential’s growth targets, as the effects of pent-up demand unleashed last year after China’s reopening begin to fade. CEO Anil Wadhwani has been on a mission to reinvigorate the insurer, which has lagged behind rival AIA Group in new business growth and share price performance.
Wadhwani unveiled a plan a year ago to more than double full-year new business profit to US$5.4 billion by 2027 versus 2022, implying 20% annual growth. The company announced in late June that it plans to buy back US$2 billion worth of shares by mid-2026.
Shares of Prudential fell 2.2% in Hong Kong on Wednesday afternoon, taking this year’s decline to 22%. AIA is down about 19% this year, while the Hang Seng Finance index has climbed 5.3%.
New business profit of its China venture Citic Prudential Life tumbled by a third from a year earlier on an actual exchange rate basis, the statement showed. Sales slid 18%, hit by new regulations on expense controls for bancassurance distribution.
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The venture has been shifting its product mix toward more profitable annuity and longer-premium payment term insurance policies. Amid a domestic economic slowdown and falling local interest rates, Chinese authorities have also issued new rules curbing guaranteed investment returns on savings-type policies, prompting its China venture to reprice them.
Hong Kong
In Hong Kong, sales declined 7% while new business profit dropped 2.8% against the high base last year, when the resumption of quarantine-free travel unleashed pent-up demand from mainland Chinese visitors to buy insurance in the former British colony.
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Sales in Indonesia tumbled 29%, with a 23% fall in new business profit, reflecting an industry-wide slowdown and “short-term challenges” in its own agency business, the insurer said.
Adjusted operating profit rose 5.6% to US$1.54 billion, after stripping out exchange rate and equity market swings. Prudential declared an interim dividend of 6.84 US cents, 9% higher than a year earlier.
