The agency channel delivered new business profit of US$2,096 million, up 75% y-o-y underpinned by new business profit from health and protection products, and fvaourable business mix. Agency sales accounted for 48% of total annual premium equivalent (APE) sales and around two-thirds of the Group’s new business profits. Bancassurance new business profit fell 8% y-o-y to US$793 million in 2023 primarily due to challenging market conditions in the Chinese Mainland and Vietnam. Excluding these two markets, new business profit increased by 23% with 11 markets delivering double-digit growth.
APE sales through the bancassurance channel increased 3% y-o-y, supported by growth in Hong Kong and Taiwan, offset by significant reductions in sales volumes in the Chinese Mainland and Vietnam. Hong Kong was a significant contributor to growth accounting for 45% of new business profits in 2023, and both new business profit and APE sales grew by over 3x during the year.
"We see an opportunity for sustained growth in Hong Kong as the drivers of demand from domestic and Chinese Mainland visitors remain intact. Eastspring's funds under management and advice increased by 7% (on an actual exchange rates basis) to US$237.1 billion, reflecting positive market movements and inflows from external clients and our life business. These positive movements were offset by expected outflows of funds managed on behalf of M&G plc," Prudential said in a statement.
During 2023 the Group adopted IFRS 17, a new accounting standard for insurance that significantly altered the Group's IFRS reporting. On the IFRS 17 metric, Group adjusted IFRS operating profit for the year was US$2,893 million, up 8% yu-o-y caluclated on a consistent basis and using constant exchange rates.
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Commenting on the results, CEO Anil Wadhwani, said: "These are a very strong set of results while operating in a challenging macro environment, with new business profit up 45% driven by a relentless focus on execution in our markets in Asia and Africa. It is also an illustration of the strength of both our agency and bancassurance distribution channels as well as an affirmation of our leadership position in many key markets."
In August 2023, Wadhwani announced a business strategy to grow new business profit at a Cagr of 15 to 20% between 2022 and 2027, underpinned by a plan to double agency, bancassurance and health New Business Profits. "To bring this to life, we are able to write new business that generates 3x the capital invested, at IRRs above 25% and with less than 4 year payback," he said.
Wadhwani is also looking expecting the value in-force will monetise into US$11 billion of free surplus in five years. The actual free surplus over the next 5 years is expected once new cohorts of business written are in line with Prudential's new growth strategy, he said.
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Prudential announced a final dividend of 14.21 US cents per share, translating into 20.47 US cents per share for the full year, up 9% y-o-y.
