18 Jan 2001
Prudential plc 2000 New Business Results
- Record group insurance and investment sales of £13.9 billion, up 13 per cent on 1999
- International sales grew by 53 per cent and represent over half of group sales
- Insurance sales at Jackson National Life up 19 per cent at £4.9 billion
- Asia insurance and investment sales were more than three times 1999 levels at £2.8 billion
- M&G equity fund sales up 77 per cent at £504 million
- Prudential Europe launches innovative equity-backed life insurance product in France
Prudential plc enjoyed record total insurance and investment sales of £13.9 billion in 2000 with growth of 13 per cent over prior year. On an annual premium equivalent basis, insurance and investment premiums were £1.9 billion, up 13 per cent on prior year. International sales were particularly strong, up 53 per cent on prior year and representing 55 per cent of the group total.
In the United States, Jackson National Life delivered another strong performance with annuity sales increasing 30 per cent on 1999 at £3.2 billion. Variable annuity sales reached record levels, up 44 per cent at £1.7 billion.
In Asia, new insurance premiums were up 75 per cent on prior year at £504 million, reflecting continued sales growth in both established and emerging markets. Gross mutual fund sales were almost four times prior year at £2.3 billion, including a first time contribution from Taiwan of £1 billion.
In the UK, M&G investment sales were up 100 per cent on prior year, due principally to a full 12 months contribution in 2000 compared to eight months in 1999. On a like for like twelve month basis, underlying equity fund sales were particularly strong, increasing 77 per cent on prior year.
Prudential group chief executive, Jonathan Bloomer, commented:
"Our new business figures represent another very strong performance for the group and clearly demonstrate the continuing benefits of our international strategy. In the United States we continue to enjoy significant sales growth in competitive market conditions and in Asia we have benefited from our strategy of broadening our distribution reach into new markets with strong contributions from Taiwan and Vietnam. We also recently commenced sales in Guangzhou after becoming the first European insurer to begin life insurance operations in China.
In the UK, we announced in the fourth quarter that we had been selected to run the British Chamber of Commerce stakeholder scheme, building on our success at being selected as the preferred stakeholder supplier for the TUC. These developments ensure that we are well positioned to benefit from the opportunities presented by the introduction of stakeholder pensions."
Single premium sales at Jackson National Life increased 19 per cent to £4.8 billion due to strong annuity sales of £3.2 billion, 30 per cent above prior year in a competitive market.
Variable annuity sales were particularly strong at £1.7 billion, 44 per cent above prior year, reflecting Jackson's success in strengthening its position in the Broker Dealer market, which has been further enhanced by the acquisition in 2000 of IFC Holdings.
Fixed annuity sales were £1.1 billion, 28 per cent above prior year, due to the success of Jackson's multi-year guarantee product, Target Select, and the impact of higher interest rates in the year. The US annuity market has seen high levels of surrenders during 2000, reflecting its competitive nature and the interest rate environment. Jackson's conservation efforts during the second half of 2000 have begun to have a positive impact on the unprecedented level of surrenders experienced in the year.
Jackson continues to broaden its product range and recently launched an innovative equity linked indexed banking deposit product, Market Path, which will be available throughout the United States.
Total insurance and investment sales in Asia of £2.8 billion have more than trebled compared to 1999 with strong performance from all operations, including investment sales from the Taiwan mutual fund operation acquired in October 2000 and an excellent first full year of the Taiwan insurance operation.
Total insurance sales of £504 million, represent an increase of 75 per cent compared to 1999, with regular premium sales more than double 1999 and single premium sales up by 51 per cent. During the quarter Prudential, through its joint venture companies, sold its first policies in China and India.
Gross investment sales in India, Taiwan and Japan reached £2.3 billion for the year, an almost four fold increase on 1999 despite falling equity markets across the region. This reflects continued strong growth in India and the acquisition of Core Pacific Investment Trust Enterprise in Taiwan. Net mutual fund inflows in 2000 were £0.3 billion.
UK Insurance Operations
Total insurance and investment sales via Prudential Financial Services were £2.3 billion compared to £2.5 billion in 1999, reflecting the impact of the reduced size of the direct salesforce. Sales of group pensions increased 39 per cent to £844 million, reflecting Prudential's success in recently winning several large group pension contracts. In the fourth quarter it was announced that Prudential had been selected to run the British Chambers of Commerce stakeholder pension scheme. This builds on the earlier success of being chosen as the TUC's preferred stakeholder provider and reaffirms Prudential's position as a leading player in the new stakeholder environment.
Insurance and investment sales via intermediaries, excluding exceptional bulk annuities of £1.1 billion in July 1999, were down nine per cent on the exceptional levels of 1999, to £2.9 billion. This reduction was principally as a result of lower with-profit bond sales partially offset by higher sales of individual annuities and investments. In an increasingly competitive market, sales of with-profit bonds remained strong and we are the leading player in this market.
Investment sales in the year were £1.1 billion compared to £533 million in 1999, reflecting a full 12 months contribution in 2000 compared to eight months in 1999 and the first time inclusion of M&G ISA season sales. On a pro forma basis, M&G investment sales for the full twelve months were in line with the prior year, principally as a result of a strong recovery in equity fund sales, up 77 per cent at £504 million, which offset lower fixed income sales due to a decline in the popularity of corporate bonds. M&G continues to maintain its leading position in the fixed income market and the growth in equity fund sales reflects first quartile 5-year performance for flagship funds such as Managed Growth and British Opportunities and the success of new fund launches such as Innovator and Global Technology.
Sales by Prudential Europe were 13 per cent above prior year at £36 million, principally due to higher sales in Germany.
Separately, Prudential is announcing today the launch of a new product in France, Prudential Europe Vie, and an additional distribution agreement with Centre Français du Patrimoine. Building on the success of Prudence Bond in the UK, Prudential Europe Vie makes this innovative equity-backed life insurance policy available in France for the first time. It will be available initially through the 385 independent financial advisers approved by Centre Français du Patrimoine.
Prudential is also announcing today the opening of a new Paris based branch, demonstrating Prudential's commitment to developing its position in the French market. Discussions are taking place with other potential distributors of Prudential Europe Vie.
Egg published a pre-closed season briefing on 14 December 2000 which covered their activities up to 11 December. Egg will announce its preliminary full year results on 19 February 2001.
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Note to Editors:
Established in 1991, Centre Français du Patrimoine is a subsidiary of Crédit Foncier de France and the largest multi-brokerage network in France. As a broker, Centre Français du Patrimoine offers 385 certified consultants a range of independently chosen insurance and investment products.