Glossary
Adjusted CSM release rate is defined as the adjusted release of CSM to the income statement in the period divided by the total of the closing CSM balance after adding back the adjusted release in the period and the effect of movements in exchange rates. For half-year reporting, the CSM release rate is annualised by multiplying the results by two.
Adjusted IFRS operating profit based on longer-term investment returns.
Adjusted operating profit less tax attributable to items within adjusted operating profit.
Adjusted total comprehensive equity represents the sum of Group IFRS shareholders’ equity and CSM, net of reinsurance (unless attaching wholly to policyholders), non-controlling interests and tax.
New business profit generated from the agency channel.
A measure of new business activity that comprises the aggregate of annualised regular premiums and one-tenth of single premiums on new business written during the period for all insurance products.
An active agent is defined as an agent who sells at least one case with a Prudential life insurance entity in the month. Average active agents per month is expressed for each reporting period as the sum of active agents in each month divided by the number of months in the period.
New business profit growth objective
Our new business growth objective assumes average exchange rates of 2022 and is based on regulatory and solvency regimes applicable across the Group at the time the objective was set. It has been updated from the previous EEV methodology to the existing TEV and free surplus methodology at 31 December 2024 and assumes this will be applicable over the period, with no material changes to the economic assumptions.
Operating free surplus generated from in-force insurance and asset management business growth objective
Our operating free surplus generated from in-force insurance and asset management business growth objective assumes average exchange rates of 2022 and is based on regulatory and solvency regimes applicable across the Group at the time the objectives was set. It has been updated from the previous free surplus methodology to the existing TEV and free surplus methodology at 31 December 2024 and assumes this will be applicable over the period, with no material changes to the economic assumptions.
New business profit generated from the bancassurance channel.
Calculated as adjusted operating profit after tax, less non-controlling interests, divided by the weighted average number of ordinary shares outstanding during the period, excluding those held in employee share trusts, which are treated as cancelled.
A customer is defined as a unique individual or entity who holds one or more policies, that has had premiums paid, with a Prudential life insurance entity, including 100 per cent of customers of the Group's joint ventures and associates. Group business is a single customer for the purpose of this definition.
Net promoter score on overall strength of customer relationship, based on customers’ survey responses to how likely they would be to recommend Prudential. It measures the response on a scale of 0–10 where 9 or 10 are Promoters, 7 or 8 are Passives and 0–6 are Detractors. The score equates to the percentage of promoters less the percentage of detractors. Our customer rNPS target relates to each market’s NPS performance versus their respective peers.
Calculated as the number of customers at the beginning of the period minus exits during the period (net of reinstatement) over the number of customers at the beginning of the period.
The cost/income ratio is calculated as operating expenses, adjusted for commissions and share of contribution from joint ventures and associates, divided by operating income, adjusted for commission, share of contribution from joint ventures and associates and performance-related fees.
This measure represents funds under management at the balance sheet date held in funds that outperformed their performance benchmark as a percentage of total funds under management over the time period stated (one or three years). Total funds under management exclude funds with no performance benchmark.
Total funds under management or advice including external funds under management, money market funds, funds managed on behalf of M&G plc and internal funds under management or advice.
For insurance business, free surplus is generally based on (with adjustments including recognition of certain intangibles and other assets that may be inadmissible on a regulatory basis) the excess of the regulatory basis net assets (TEV total net worth) over the TEV capital required to support the covered business. Adjustments are also made to enable free surplus to be a better measure of shareholders' resources available for distribution. For asset management and other non-insurance operations (including the Group’s central operations), free surplus is taken to be IFRS shareholders’ equity, net of goodwill attributable to shareholders, with central Group debt recorded as free surplus to the extent that it is classified as capital resources under the Group’s capital regime. This measure Excludes intangible assets representing rights under distribution contracts and other intangibles.
Free surplus ratio is defined as the sum of Group total free surplus, excluding distribution rights and other intangibles, and the TEV required capital of the life business, divided by the TEV required capital of the life business. Group total free surplus, excluding distribution rights and other intangibles, consists of the free surplus of the insurance business combined with the free surplus of asset management and other non-insurance operations. Group total free surplus forms part of the TEV shareholders' equity. Given the differing basis of preparation for the IFRS and TEV results, individual TEV and IFRS line items are not directly comparable.
Group TEV equity, excluding goodwill attributable to equity holders.
Shareholders' equity prepared in accordance with the TEV methodology.
Group TEV equity per share is calculated as Group TEV equity divided by the number of issued shares at the end of the period.
Group TEV per share is calculated as Group TEV divided by the number of issued shares at the end of the period.
Represents all assets managed or administered by or on behalf of the Group, including those assets managed by third parties. Assets under management include managed assets that are included within the Group’s statement of financial position and those assets belonging to external clients outside the Prudential Group, which are therefore not included in the Group’s statement of financial position.
Leverage measure calculated as the Group gross debt, including commercial paper, as a proportion of the sum of IFRS shareholders’ equity, 50 per cent of the surplus in the Group’s with-profit funds, 50 per cent of the CSM and the Group's gross debt including commercial paper.
Estimated GWS capital resources in excess of the GPCR before allowing for the 2025 first interim dividend. Prescribed capital requirements are set at the level at which the local regulator of a given entity can impose penalties, sanctions or intervention measures. The estimated GWS Group capital adequacy requirements require that total eligible Group capital resources are not less than the GPCR. GWS capital surplus is determined on a shareholder basis and a total Group basis.
New business profit from health products (see definition below).
Health products comprise health and personal accident insurance products, which provide morbidity or sickness benefits and include health, disability, critical illness and accident coverage. These typically are annually renewable and would involve diagnosis and treatment from licensed physicians/medical facilities. Critical illness products paying lump sum benefits are not in scope.
IFRS shareholders’ equity per share is calculated as closing IFRS shareholders’ equity divided by the number of issued shares at the end of the period.
Represents the sum of APE sales plus renewal insurance premiums, which represents premiums paid on regular premium products, subsequent to the first-year premium.
Net cash amounts remitted by businesses are included in the holding company cash flow. This comprises dividends and other transfers from businesses, net of capital injections, that are reflective of earnings and capital generation.
Operating free surplus generated from insurance and asset management business (see definition below) less central costs, eliminations and restructuring costs, net of tax.
A state in which greenhouse gas emissions from activities in the value chain of an organisation are reduced as close to zero as possible, with any residual emissions balanced by removals from the atmosphere, in a time frame consistent with the Paris Agreement. Our ambition is that the assets we hold on behalf of our insurance companies will be net zero by 2050, as part of Prudential’s signatory requirements to the UN-convened Net Zero Asset Owner Alliance (NZAOA).
New business profit divided by APE sales over the same period.
Calculated as new business profit divided by the opening Group TEV for insurance business operations, excluding goodwill attributable to equity holders and other intangibles.
Presented on a post-tax basis, on business sold in the period, calculated in accordance with Group TEV methodology.
New business profit divided by PVNBP sales over the same period.
Average monthly agency new business profit divided by the average monthly active agents for the relevant period. Includes 100 per cent of new business profit and active agents in joint ventures and associates.
Operating free surplus generated from in-force insurance business represents amounts emerging from the in-force business during the period before deducting amounts reinvested in writing new business and excludes restructuring costs and non-operating items. For asset management businesses, it equates to post-tax IFRS adjusted operating profit for the period. Central costs are excluded from this amount.
Equates to operating free surplus generated from in-force insurance and asset management business net of investment in new business.
Calculated as TEV operating profit divided by the opening Group TEV excluding intangibles.
Calculated as Adjusted operating profit after tax and non-controlling interest divided by the average IFRS shareholders’ equity.
Calculated as the aggregate of single premiums and the present value of expected future premiums from regular premium new business, allowing for lapses and the other assumptions made in determining the TEV new business profit.
Estimated ratio of capital resources over GPCR attributable to the shareholder business, before allowing for the first interim dividend for the period.
TEV operating profit is profit after tax calculated under the Group's TEV methodology excluding changes in economic assumptions and other market related movements, the mark-to-market value movements on core structural borrowings for shareholder-financed operations and the gain or loss attaching to corporate transactions.
Tier 1 capital in accordance with the classification of tiering capital under the GWS framework, which reflects the different local regulatory regimes along with guidance issued by the Hong Kong IA.
Estimated ratio of capital resources over GPCR attributable to both the shareholder and policyholder business, before allowing for the first interim dividend for the period.
Comprises total Group financial investments, investment property, Cash and Cash equivalents as recognised on the balance sheet.
Financial results that are prepared on a supplementary basis to the Group’s IFRS results and are a way of measuring the current value to shareholders of the future profits from life business written based on a set of assumptions.
Net promoter score based on feedback following an individual purchasing, servicing or claims transaction. Based on customers’ survey responses to how likely they would be to recommend Prudential. It measures the response on a scale of 0-10 where 9 or 10 are Promoters, 7 or 8 are Passives and 0-6 are Detractors. The score equates to the percentage of promoters less percentage of detractors.
Reflects a portfolio’s exposure to carbon-intensive companies, expressed in tCO2e/$m revenue. The WACI is currently the market standard for measuring the carbon footprint of an investment portfolio, as described by global disclosure frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD).
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Contact details for M&G and Prudential UK customers and policyholders
For M&G and Prudential UK customers and policyholders:
In October 2019, Prudential plc separated its UK operations and, as a result of this separation, Prudential UK is now owned by M&G plc. The M&G plc group is a separate, independent group and as such we are not able to help any M&G or Prudential UK customers or policyholders.
Therefore, to find the best way to make contact, please visit www.pru.co.uk/contact-us
For further information on the M&G plc group, please visit the M&G website: www.mandg.com
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