Prudential reported a slowdown in new business in the first half of the year, but remained confident that it would meet its targets for the year.
In the first six months of the year, the Asia-focused insurer reported new business profit – a key gauge of future profitability – fell to $1.5bn (£1.1bn). This was down one per cent on last year when taking exchange rate movements into account.
Excluding the effect of interest rates and other economic impacts new business profit was up six per cent. Adjusted operating profit, meanwhile, rose nine per cent on last year to hit $1.5bn
The firm reported that new business profit fell three per cent in Hong Kong compared to last year, when there was strong growth in the wake of the pandemic.
In China, both regulatory changes and the ongoing economic slowdown combined to dent sales. As a result, new business profit fell 33 per cent compared to a 21 per cent fall last year.
Last year was a particularly strong year for Prudential given the extent of pent-up demand following the pandemic, and so the comparisons to this year were always likely to be relatively weak.
Nevertheless, Prudential said it had seen a “pick up in sales momentum” in June which has continued into the second half of the year.
New business profit is expected to grow at a rate consistent with meeting the 2022-2027 objective across 2024.
Prudential announced a first interim dividend of 6.84 cents (5.2p) per share, up nine per cent on the same period last year.
“We entered this year with a clear strategy and a set of outcomes we are confident in achieving by 2027, namely a compounded annual growth rate for new business profit of 15 to 20 per cent and double-digit for cash generation, both measured from a 2022 base,” boss Anil Wadhwani said.
The company said it was still confident of meeting those targets based on ongoing economic changes in its target market.
“The structural drivers of growth in Asia and Africa for our industry remain intact, with ongoing strong demand in respect of protection, long-term savings and retirement propositions as broader based economic growth returns to our markets,” it said.
Analysts at Panmure Liberum said “the long-term growth drivers across Asia and Pru’s ability to execute them remain intact”.
However, Susannah Streeter, head of money and markets at Hargreaves Lansdown, warned that “continuing Chinese economic headwinds are clearly a drag on its efforts to claw in more profitable business”.
Shares closed 2.4 per cent in Hong Kong following the results while its London shares are down 22 per cent in 2024 so far.