18 Jan 2000

Prudential 1999 new business results

  • Record total funds inflow of over £18bn
  • Total long term insurance and investment premiums up 61% to £12.3bn
  • UK insurance and investment premiums up 61% to £7.4bn
  • Jackson National Life premiums up 43% to £4.1bn
  • Asia insurance and investment premiums over four times 1998 levels
  • egg deposits reach £7.6bn - customers exceed 800,000, including 175,000 egg card accounts.

Prudential's group-wide operations enjoyed a record year in 1999 with total insurance and investment sales of £12.3bn, up 61% on 1998. Banking deposits continued their strong performance and now stand at £8.1bn, including £7.6bn of egg deposits.

In the UK, total insurance and investment premiums of £7.4bn were also up 61% over 1998. This increase predominantly reflects the continued strong growth of the IFA channel, which was up 76% to £5.4bn. The IFA channel now accounts for almost three quarters of Prudential's UK insurance and investment sales. Sales by M&G for the eight months since acquisition totalled £583m, an increase of 20% over the equivalent prior year period.

Overseas, Jackson National Life sales continued their strong growth up 43% on prior year at £4.1bn. Within this result, variable annuity sales were more than double 1998 volumes at £1.2bn.

In Asia, new business premiums were more than four times 1998 volumes. Insurance sales have more than doubled to £288m, while mutual fund sales in India were £583m, compared to the seven months' sales of £72m in 1998.

UK banking operations continue to perform strongly, with £8.1bn of deposits at year end and an asset book of over £2.0bn. egg now has in excess of 800,000 customers and has accepted in excess of 175,000 credit card accounts in the four months since launch.

Deputy group chief executive Jonathan Bloomer commented:

"Prudential's new business figures represent another very strong performance with a record £18bn inflow of funds. This provides further confirmation of the success of our strategy of broadening distribution reach and increasing product choice across all of our businesses.

In the US, variable annuity sales were more than double 1998's level and in Asia sales have quadrupled, representing significant progress in both these markets.

I am particularly pleased by the progress in integrating M&G with our existing fund management operations, and egg continues to show excellent growth. The response to our new egg card has been tremendous and we continue to acquire new customers at an impressive rate."

Uk Operations

IFA BUSINESSES
In the twelve months to December 1999, IFA insurance and investment sales were up 76% to £5.4bn. This reflects the continued strong sales of Prudence Bond, totalling £1.9bn compared with £1.2bn in 1998, and the inclusion of eight months of M&G's IFA sales. In addition, the impact of two major bulk annuities sold by Prudential Annuities in July, added £1.1bn to the result. IFA sales now account for almost three quarters of UK insurance and investment sales (1998: 66%).

M&G
M&G sales (IFA and direct) for the eight months to December 1999 were £583m, up 20% on the same period in 1998. Total funds under management stood at £20.4bn up from £18.5bn twelve months ago. M&G's corporate bond funds were particularly successful, attracting new funds of £347m.

PRUDENTIAL RETAIL
Consultant productivity continues to improve at Prudential Retail where insurance and investment sales have grown by 16% over 1998 to £1.8bn. Over the same period, sales force headcount has been reduced by over 40% to less than 1,900. 1999 has seen a shift away from our traditional regular premium pension products, with strong growth in single premium investment bonds.

Mortgage sales also continue to perform strongly, with a net increase in Prudential branded mortgage business of £600m in 1999.

egg: AND PRUDENTIAL BANKING
egg continues to launch new products and expand its customer services. During 1999 egg launched the egg card and internet shopping zone as well as offering internet only savings accounts and on-line mortgage and loan application facilities.

Jackson National Life

Total insurance and investment sales were 43% ahead of 1998 at £4.1bn, with variable annuities more than double the prior year at £1.2bn reflecting Jackson's successful marketing strategies, new product development and the on-going strength of the US equity market.

Fixed annuities are 23% ahead of prior year at £826m, after a slow start to the year, benefiting from the recent increases in US interest rates. Fourth quarter fixed annuity sales of £257m were more than double that in the equivalent period last year.

Asia

Total insurance and investment sales in Asia have more than quadrupled compared to the corresponding period in 1998.

Total insurance sales more than doubled to £288m due, in part, to the continuing strong performance of the PruInvestor Bond and the PruLink HiSaver Account in Singapore.

Mutual fund sales in India reached £583m for the year. Gross redemptions in the quarter totalled £38m bringing redemptions for the year to £272m, reflecting the liquid nature of the money market funds.

Enquiries

Jeremy Reynolds / Kevin Russell
Prudential Media Relations
Tel: 0171 548 3721 / 3723

David Doyle
Investor Relations
Tel: 0171 548 3753

PRUDENTIAL PLC - 1999 NEW BUSINESS PREMIUMS - FULL YEAR

Schedule 1

                          Single        Regular           Total   
                     1999  1998  +/- 1999 1998 +/-   1999  1998  +/-
                      £m    £m    %    £m  £m  %      £m    £m   %
____________________________________________________________________
UK Operations

IFA Channel:

Individual Pensions   218   216   1%   50  42  19%    268   258   4%     
Corporate Pensions    593   434  37%   95  53  79%    688   487  41%
Life                2,084 1,434  45%   75  74   1%  2,159 1,508  43%
Annuities           1,805   699 158%    -   -   0%  1,805   699 158%
Investment Products   372    54 589%    5   -   0%    377    54 598%
____________________________________________________________________
Sub-Total           5,072 2,837  79%  225 169  33%  5,297 3,006  76%
____________________________________________________________________
DSS Rebates            64    33  94%    -   -   0%     64    33  94%
____________________________________________________________________
Total               5,136 2,870  79%  225 169  33%  5,361 3,039  76%

____________________________________________________________________

M&G (Direct):

Investment Products   200     -   0%    8   -   0%    208     -   0%
____________________________________________________________________
Total                 200     -   0%    8   -   0%    208     -   0%

____________________________________________________________________

Prudential Retail:

Individual Pensions    35    41 (15%)  51  75 (32%)    86   116 (26%)
Corporate Pensions      4     3  33%   39  47 (17%)    43    50 (14%)
Life                  883   608  45%   49  55 (11%)   932   663  41%
Annuities             534   462  16%    -   -   0%    534   462  16%
Investment Products    40    81 (51%)   7  15 (53%)    47    96 (51%)   
____________________________________________________________________
Sub-Total           1,496 1,195  25%  146 192 (24%) 1,642 1,387  18%
____________________________________________________________________
DSS Rebates           175   175   0%    -   -   0%    175   175   0%
____________________________________________________________________
Total               1,671 1,370  22%  146 192 (24%) 1,817 1,562  16%

____________________________________________________________________

Total UK Operations:

Individual Pensions   253   257  (2%) 101 117 (14%)   354   374  (5%)
Corporate Pensions    597   437  37%  134 100  34%    731   537  36%
Life                2,967 2,042  45%  124 129  (4%) 3,091 2,171  42%
Annuities           2,339 1,161 101%    -   -   0%  2,339 1,161 101%
Investment Products   612   135 353%   20  15  33%    632   150 321%
____________________________________________________________________
Sub-Total           6,768 4,032  68%  379 361   5%  7,147 4,393  63%
____________________________________________________________________
DSS Rebates           239   208  15%    -   -   0%    239   208  15%
____________________________________________________________________
Total UK Operations 7,007 4,240  65%  379 361   5%  7,386 4,601  61%

____________________________________________________________________

Jackson National Life:

Fixed Annuities       826   670  23%    -   -   0%    826   670  23%
Equity Linked Index 
Annuities             431   283  52%    -   -   0%    431   283  52% 
Variable Annuities  1,187   531 124%    -   -   0%  1,187   531 124%
Guaranteed Investment 
Contracts             994 1,351 (26%)   -   -   0%    994 1,351 (26%)
GIC-European 
Medium Term Note      624     -   0%    -   -   0%    624     -   0%        
Life                    -     -   0%   24  28 (14%)    24    28 (14%)
____________________________________________________________________
Sub-Total           4,062 2,835  43%   24  28 (14%) 4,086 2,863  43%   

____________________________________________________________________

Prudential Asia:

Insurance Products    182    42 333%  106  79  34%    288   121 138%
Investment Products   583    72 710%    -   -   0%    583    72 710%
____________________________________________________________________
Sub-Total             765   114 571%  106  79  34%    871   193 351%

____________________________________________________________________

Group Total:

Insurance Products 10,639 6,982  52%  489 453   8% 11,128 7,435  50%
Investment Products 1,195   207 477%   20  15  33%  1,215   222 447%
____________________________________________________________________
Group Total        11,834 7,189  65%  509 468   9% 12,343 7,657  61%
____________________________________________________________________


                           1999    1998
                             £m     £m
____________________________________________________________________
UK Banking Products

Funds Under Management:

Prudential Banking          577    856
egg:|                     7,565  1,332
____________________________________________________________________
Total                     8,142  2,188

____________________________________________________________________

Asset Book:

Prudential Banking        1,255    664
egg:|                       802     11
____________________________________________________________________
Total                     2,057    675

____________________________________________________________________
General Insurance
UK Gross Premiums Written   318    310
____________________________________________________________________

Schedule 2

                           Single        Regular           Total   
                     1999  1998  +/- 1999 1998 +/-   1999  1998  +/-
                      £m    £m    %    £m  £m  %      £m    £m   %
____________________________________________________________________
UK Operations

Retail IFA:

Individual Pensions   179   216 (17%)  48  42  14%    227   258 (12%)
Corporate Pensions    110    45 144%   14  16 (13%)   124    61 103%        
Life                2,076 1,434  45%   74  74   0%  2,150 1,508  43%
Annuities             118    93  27%    -   -   0%    118    93  27%
Investment Products    49    54  (9%)   3   -   0%     52    54  (4%)
____________________________________________________________________
Sub-Total           2,532 1,842  37%  139 132   5%  2,671 1,974  35%
____________________________________________________________________
DSS Rebates            64    33  94%    -   -   0%     64    33  94%
____________________________________________________________________
Total               2,596 1,875  38%  139 132   5%  2,735 2,007  36%

____________________________________________________________________

Prudential Group Pensions:

Corporate Pensions    483   389  24%   81  37 119%    564   426  32%
Annuities             147   155  (5%)   -   -   0%    147   155  (5%)
____________________________________________________________________
Total                 630   544  16%   81  37 119%    711   581  22%

____________________________________________________________________

Prudential Annuities:

Annuities           1,540   451 241%    -   -   0%  1,540   451 241%
____________________________________________________________________

M&G IFA:

Individual Pensions    39     -   0%    2   -   0%     41     -   0%
Life                    8     -   0%    1   -   0%      9     -   0%
Investment Products   323     -   0%    2   -   0%    325     -   0%
____________________________________________________________________
Total                 370     -   0%    5   -   0%    375     -   0%

____________________________________________________________________
Total IFA Channel:  5,136 2,870  79%  225 169  33%  5,361 3,039  76%

____________________________________________________________________

M&G Summary (IFA + Direct):

Individual Pensions    39     -   0%    2   -   0%     41     -   0%   
Life                    8     -   0%    1   -   0%      9     -   0%
Investment Products   523     -   0%   10   -   0%    533     -   0%
____________________________________________________________________
Total                 570     -   0%   13   -   0%    583     -   0% 

____________________________________________________________________

Notes to Schedules:

1.The table above analyses UK IFA channel sales by business unit and provides a summary of the M&G new business premiums for the eight month period from acquisition to 31 December.

2.The figures for overseas operations have been calculated using average exchange rates. The applicable rate for Jackson National Life is 1.62 (December 1998 - 1.66). After adjusting for the impact of foreign currency movements, the Group's single premium sales increased by 63%, and regular premium sales increased by 8%.

3.The 1998 figures exclude the results of the Australian and New Zealand operations that were sold in that year.

Jackson National Life Insurance Company

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Prudential plc is an international company incorporated in the United Kingdom, and its affiliated companies constitute one of the world’s leading financial services groups. It provides insurance and financial services directly and through its subsidiaries and affiliates throughout the world, and it has been in existence for over 170 years. Prudential plc is not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America, or the Prudential Assurance Company, a subsidiary of M&G plc (a company incorporated in the United Kingdom).