- APE sales2 up 9 per cent (5 per cent) to $4,393 million with both agency and bancassurance channels delivering APE sales growth in the second half of 2022
- New business profit3 down (11) per cent ((14) per cent) to $2,184 million with the impact of higher volumes being offset by higher interest rates and business mix effects
- Adjusted operating profit4 up 8 per cent (4 per cent) to $3,375 million
- EEV operating profit5 up 15 per cent (12 per cent) to $3,952 million. EEV shareholders equity is $42.2 billion, equivalent to 1,534 cents per share
- GWS shareholder capital surplus over GPCR of $15.6 billion6, equivalent to a cover ratio of 307 per cent6 (2021: 320 per cent7)
- Operating free surplus generated8 from life and asset management business up 9 per cent (6 per cent) to $2,193 million
- Second interim dividend of 13.04 cents per share, 18.78 cents per share for the full year, up 9 per cent
"2022 was the first full year for the Group as an Asia and Africa focused business. We have delivered a resilient performance against a backdrop of Covid-19-related disruption and broader macroeconomic volatility. The results reflect the advantage of our diversified business model across the Asia region, highlighted by a balanced contribution to APE sales and new business profit from Hong Kong, the Chinese Mainland and Taiwan and from South-east Asia, including Singapore, Indonesia and Malaysia.
"The removal of the bulk of Covid-19-related restrictions across the region and the progressive opening up of the Chinese Mainland economy has meant that 2023 has started well with encouraging progress in year-on-year sales, with Group-wide APE sales for the two months ended February 2023 up 15 per cent9 over the prior year. In Hong Kong we have seen a gradual increase in cross-border traffic from the Chinese Mainland as travel restrictions are eased. Demand for savings products across the Hong Kong business is driving the increase in APE sales in the first two months of 2023.
"I'm honoured to have joined Prudential at such an exciting time with a tremendous opportunity for long term growth ahead of us. As we celebrate our 175th anniversary and 100 years of operations in Asia, the brand is as strong as ever, with leading market positions in many of our key markets. Our progress over recent years is a testament to our people, reflecting their talent and their commitment to serving our customers."
Anil Wadhwani
Chief Executive Officer
| Summary financials | Full year 2022 $m | Full year 2021 $m | Change on AER basis1 | Change on CER basis1 |
| New business profit3 | 2,184 | 2,526 | (14)% | (11)% |
| Operating free surplus generated8 | 2,193 | 2,071 | 6% | 9% |
| Adjusted operating profit4 | 3,375 | 3,233 | 4% | 8% |
| IFRS profit after tax10 | 1,007 | 2,214 | (55)% | (53)% |
| | | | | |
| | 31 Dec 2022 | 31 Dec 2021 | ||
| | Total | Per share | Total | Per share |
| EEV shareholders' equity | $42.2bn | 1,534¢ | $47.4bn | 1,725¢ |
| IFRS shareholders' equity | $17.0bn | 617¢ | $17.1bn | 622¢ |
IFRS 17 Update
Effective 1 January 2023, the new insurance accounting standard, IFRS 17, will replace IFRS 4. This change will impact the timing of profit recognition and initial shareholders' equity, but will not affect the Group's regulatory capital generation or management, operating free surplus generation, business strategy, EEV basis results or dividend policy.
In summary, we expect an increase in the opening shareholder equity on 1 January 2022 of between $1.8 billion and $2.7 billion, reflecting the positive cumulative impact of net timing differences. The adjusted IFRS shareholders' equity11 is also expected to be more closely aligned with the Group's audited EEV shareholders' equity.
Looking ahead, the Group estimates a decrease in the adjusted IFRS 17 operating profit for 2022 of between $650 million and $850 million compared with IFRS 4. This is largely due to timing differences that led to the increase in shareholders' equity and the removal of one off gains recognised in IFRS 4 that will be smoothed into profit in IFRS 17. More details on the impact of IFRS 17 adoption will be provided in June 2023.
Notes
1 Further information on actual and constant exchange rate bases is set out in note A1 of the IFRS financial statement. All results are presented in US dollars.
2 APE sales is 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 year for all insurance products, including premiums for contracts designated as investment contracts under IFRS 4. It is not representative of premium income recorded in the IFRS financial statements. See note II of the Additional unaudited financial information for further explanation.
3 New business profit, on a post-tax basis, on business sold in the period, calculated in accordance with EEV Principles. See the basis of preparation to the EEV basis results for further explanation.
4 'Adjusted operating profit' refers to adjusted IFRS operating profit based on longer-term investment returns from continuing operations and is stated after excluding the effect of short-term fluctuations in investment returns against long-term assumptions and other corporate transactions. This alternative performance measure is reconciled to IFRS profit for the period of $1,007 million (2021: $2,214 million) in note B1.1 of the IFRS financial results.
5 EEV operating profit is based on longer-term investment returns and is stated after excluding the effect of short-term fluctuations in investment returns against long-term assumptions and other corporate transactions, and excludes the effect of changes in economic assumptions and the mark-to-market value movement on core borrowings.
6 Estimated GWS capital position reflects eligible group capital resources in excess of the group prescribed capital requirements (GPCR) attributable to the shareholder business, before allowing for the 2022 second cash interim dividend and the redemption of $0.4 billion of senior debt in January 2023. Further detail on the estimated GWS capital position, including the basis of preparation, is included in note I(i) of the additional unaudited financial information.
7 31 December 2021 comparative amounts include the effect of the adoption of HK RBC, C-ROSS Phase II and the redemption of $1,725 million of subordinated debt completed in January 2022.
8 Operating free surplus generated from insurance and asset management operations before restructuring costs. Definition and further information is set out in 'Movement in Group free surplus' of the EEV basis results.
9 On a constant exchange rate basis.
10 From continuing operations. Comparative figures exclude the results of the Group's discontinued US operations (Jackson).
11 Defined as IFRS 17 shareholders' equity plus tax adjusted contractual service margin and risk adjustment.
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We expect to announce our Full Year 2022 Results to the Hong Kong Stock Exchange and to the UK financial Media at 12.00pm HKT – 4.00am UKT – 12.00am ET on Wednesday 15 March 2023.
The announcement will be released on the London Stock Exchange at 3.00pm HKT – 7.00am UKT – 3.00am EST on Wednesday 15 March 2023.
A pre-recorded presentation for analysts and investors will be available on-demand from 12pm HKT – 4.00am UKT – 12.00am ET on Wednesday, 15 March 2023 using the following link:https://www.investis-live.com/prudential/63edfe6533aa1a12009e4fda/vdfwae. A copy of the script used in the recorded video will also be available from 12pm HKT – 4.00am UKT – 12.00am ET on Wednesday, 15 March 2023 on Prudential plc's website.
A Q&A event for analysts and investors will be held at 5.00pm HKT – 9.00am UKT – 5.00am ET on Wednesday, 15 March 2023. We offer the option to join us in person or virtually.
Registration to join the Q&A event in person, in the Four Seasons Hong Kong, 8 Finance Street, Central, Hong Kong
To register to attend the event in person, please respond to this message.
Registration to view the Q&A event online
To register to watch the event and submit questions online, please do so via the following link: https://www.investis-live.com/prudential/63ee55c8aaec340f00b5312a/udesc. The webcast will be available to watch afterwards using the same link.
Dial-in details
A dial-in facility will be available to listen to the event and ask questions: please allow 15 minutes ahead of the start time to join the call (lines open half an hour before the call is due to start, i.e. from 4.30pm HKT – 8.30am UKT – 4.30am ET).
Dial-in: +44 (0) 20 3936 2999 (UK and international) / 0800 640 6441 (Freephone UK), Participant access code: 817924. Once participants have entered this code their name and company details will be taken.
Transcript
Following the call a transcript will be published on the results centre page of Prudential's website on Mon, 20 March 2023.
Playback facility
Please use the following for a playback facility: +44 (0) 20 3936 3001 (UK and international), replay code 325964. This will be available from approximately 10.00pm HKT – 2.00pm UKT – 10.00am ET on Wednesday, 15 March until 7.59am HKT – 11.59pm UKT – 7.59am ET on Saturday, 25 March 2023.
Hashtag: #Prudentialplc
The issuer is solely responsible for the content of this announcement.
About Prudential plc
Prudential plc provides life and health insurance and asset management in 23 markets across Asia and Africa (at 31 December 2022). The business helps people get the most out of life, by making healthcare affordable and accessible and by promoting financial inclusion. Prudential protects people's wealth, helps them grow their assets, and empowers them to save for their goals. The business has dual primary listings on the Stock Exchange of Hong Kong (2378) and the London Stock Exchange (PRU). It also has a secondary listing on the Singapore Stock Exchange (K6S) and a listing on the New York Stock Exchange (PUK) in the form of American Depositary Receipts. It is a constituent of the Hang Seng Composite Index and is also included for trading in the Shenzhen-Hong Kong Stock Connect programme and Shanghai-Hong Kong Stock Connect programme.
Prudential is not affiliated in any manner with Prudential Financial, Inc. a company whose principal place of business is in the United States of America, nor with The Prudential Assurance Company Limited, a subsidiary of M&G plc, a company incorporated in the United Kingdom. https://www.prudentialplc.com/
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