Prudential beats expectations but growth slows amid China challenges
Insurance giant Prudential has notched up better-than-expected annual earnings, but revealed sharply slower growth amid ongoing woes in the key Chinese market.
The London-listed group, which is focused on Asian markets, reported an 11% rise in new business profit – an important gauge of future earnings for insurers – to 3.08 billion US dollars (£2.38 billion) on a constant currency basis in 2024.
In reported currencies, new business profit was 2% lower, it added.
The result was better than forecast and Pru lifted its dividend payout to shareholders, but the figures also showed growth was down significantly on the 45% profit growth delivered in 2023.
The results showed that new business profits in mainland China halved to 111 million dollars (£85.6 million) in 2024, while it saw 2% growth to 1.44 billion dollars (£1.11 billion) in Hong Kong.
Hong Kong was boosted a year earlier after the removal of Covid restrictions and the opening of the border with mainland China.
Pru said: 'Mainland China's macroeconomic environment and, in particular, the substantial reduction in long-dated government bond yields, presented a key challenge for the Mainland China life industry during 2024, which we expect to continue into 2025.'
But chief executive Anil Wadhwani put faith in the group's long-term growth prospects.
He said: 'The long-term growth trends inherent in our Asia and Africa markets are reasserting themselves, creating significant opportunities for us.
'Insurance penetration rates in Asia are low and there is continued, and growing, demand for long-term savings and protection products across our markets, alongside a need for wealth management and retirement planning, particularly in our higher income Asian markets.
'We are well positioned to capitalise on this growth opportunity.'
The group said it expects to grow underlying operating profits by 10% in 2025, holding firm on the 10% growth in that measure seen in 2024.
Richard Hunter, head of markets at Interactive Investor, said the figures paint a 'picture of a group which is beginning to fire on all cylinders'.
But he added: 'Less positively, and from a broader perspective, heightened geopolitical tensions between the West and China cannot be overlooked.'
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