17 Oct 2000
Prudential plc Third Quarter 2000 New Business Results
Embargo: 07.00 Tuesday 17 October 2000
- Record group insurance and investment sales in excess of £9.8 billion
- International sales account for 53 per cent, up from 40 per cent in 1999
- Jackson National Life new insurance premiums up 20 per cent to £3.9 billion
- Asia insurance and investment sales more than double 1999 levels at £1.3 billion
- M&G investment sales up 19 per cent at £236 million in the quarter
- Prudential to reduce charges for existing pensions customers in the UK
Prudential plc reported record insurance and investment sales on an annual premium equivalent basis of £1.3 billion in the first nine months of 2000 with growth of five per cent over prior year. Total group insurance and investment premiums were £9.8 billion
In the United States, Jackson National Life continued to grow strongly with new insurance sales increasing 20 per cent on the first nine months of 1999. Variable annuity sales have performed particularly well, up 50 per cent at £1.4 billion.
In Asia, new insurance premiums for the first nine months of 2000 were 84 per cent ahead of prior year at £328 million with significant contributions from Prudential's new operations in Vietnam and Taiwan. Net mutual fund sales in India were 46 per cent ahead of prior year at £313 million.
M&G's investment sales in the quarter were up 19 per cent on the third quarter 1999 at £236 million, reflecting a strong recovery in sales of equity based products.
Egg continues to perform strongly acquiring more than 120,000 new customers in the quarter and increasing retail assets to £3.4 billion, including credit card balances of £736 million.
Prudential group chief executive, Jonathan Bloomer, commented:
"Our new business figures reflect the benefits of our international diversification. We continue to enjoy significant sales growth in the US. In Asia, where sales have more than doubled, we have made significant progress in our strategic objective of expanding our product range and customer base with two major initiatives: the acquisition of a controlling interest in a unit trust business in Taiwan; and the start of trading by our life insurance joint venture in China."
We continue to implement low cost business models for our UK insurance businesses, ensuring we operate profitably as a leader in the stakeholder market and build on our success at being selected to run the TUC stakeholder scheme. We are also announcing today that existing personal pensions customers will benefit from lower charges from April 2001.
Jackson National Life
Single premium insurance sales at Jackson National Life were up 20 per cent on prior year at £3.9 billion reflecting record annuity sales, 39 per cent above the first nine months of 1999 at £2.5 billion.
Fixed annuity sales were particularly strong in a competitive market at £792 million, 39 per cent above prior year, reflecting increased sales of the Target Select product and the impact of higher interest rates this year.
Variable annuity sales reached record levels for the first nine months of the year at £1.4 billion, 50per cent above prior year and £222 million ahead of full year sales in 1999, due to Jackson's successful marketing strategies and continuing consumer demand for equity based products. Jackson is in 18th position in the large and competitive variable annuity market, up from 23rd at the end of 1999.
Jackson National Life recently completed the purchases of Highland Bancorp and IFC Holdings, continuing the expansion of its product lines, distribution channels and customer base in the US.
New insurance and investment sales were more than double the same period last year at £1.3billion.
Total insurance sales increased 84 per cent to £328 million reflecting strong sales of single premium linked business in Singapore and the inclusion of £56 million of sales from Taiwan and Vietnam. Single premium linked sales in Singapore were more than four times prior year at £65 million. During the quarter there have been a number of product launches, including a new internet product in Singapore and three new funds in Malaysia.
In India, net mutual fund sales increased 46 per cent ahead of the first nine months of 1999 at £313 million.
Investment sales in the quarter of £236 million were up 19 per cent on the third quarter of 1999. This reflects successful product launches and improved equity fund performance, with the new Innovator and Global Technology funds performing particularly well. M&G has enjoyed a recovery in sales across its equity based products, notably Managed Growth, and also maintained its leadership in the fixed income market although corporate bonds have proved less popular with investors this year. In the first nine months of 2000, M&G investment sales were £871 million, in line with the same period last year, as the strong increase in equity sales offset reduced fixed income sales.
UK Insurance Operations
Excluding exceptional bulk annuity sales of £1.1 billion in July 1999, insurance and investment sales via intermediaries were down 12 per cent on the exceptional levels of 1999, to £2.1 billion, principally as a result of lower with profits bond sales partially offset by higher individual pension sales.
Total insurance and investment sales via Prudential Financial Services were 18 per cent down on the first nine months of 1999 at £1.6 billion. Significant and sustained progress has been made in improving consultant productivity. Prudential continues to implement low cost business models, ensuring it operates profitably as a leader in the new stakeholder environment. Prudential has enjoyed significant success in attracting existing large group pensions clients to its new e-commerce platform.
Egg continued to build the asset side of its balance sheet in the first nine months of the year. The mortgage book now stands at £2.3 billion and Egg credit card balances have reached £736 million. The personal loan book grew to £391 million following record disbursements of £109 million in the quarter.
Retail deposits now stand at £7.3 billion with a net outflow of funds for Egg in the quarter of £443 million. The deposit customer base however, remains stable with 75,000 new accounts opened in the first nine months of the year. Seventy-four per cent of deposit servicing transactions are performed online.<
Egg now has 1.2 million customers, including almost 600,000 credit card customers.
Prudential announces today that its stakeholder proposition will be accompanied by lower charges for existing pension customers.
From April 2001 customers who hold personal pension plans can expect to benefit, on the Personal Investment Authority's mid rate illustration basis, from future charges of less than one per cent per annum.
Prudential will also be offering its employers who have group defined contribution schemes, a number of propositions including a new product range, to move their scheme into the stakeholder environment. By using Prudential's new e-commerce platform, employers can offer their employees the benefit of charges of one per cent or less.
Sales by Prudential Europe were 35 per cent above prior year levels at £27 million. Sales in Germany have benefited from the commencement of sales through our joint venture with Signal Iduna.
Notes to Editors:
- Annual premium equivalent sales comprise regular premium sales plus one tenth of single premium sales.
- Financial Calendar
Full year new business results - Thursday 18 January 2001
Announcement of 2000 full year results - Thursday 22 February 2001
Ex-dividend date for 2000 final dividend - Wednesday 28 March 2001
Annual General Meeting - Thursday 10 May 2001
Payment of final dividend - Wednesday 30 May 2001
For further information please contact:
Geraldine Davies 020 7548 3911
Tina Christou 020 7548 3719
Stuart Blackmore 020 7548 3520
Rebecca Burrows 020 7548 3537