Prudential UK Sales Fall But With-Profits Prosper Print E-mail

TEP – 28 October 2009

Falling annuity sales contributed to Prudential’s retail UK sales falling 22% in Q3 to £157m compared to the same period last year, but strong with-profits sales helped offset the decline.

The insurer reported retail sales over the first nine months also fell by 13% to £531m.

Individual annuity sales were particularly disappointing for the first nine months of 2009, down 21% on the same period last year to APE £164m, as a result of a reduction of 13% in average case sizes and the group's strict pricing discipline.

The stock market falls seen in 2008 and early 2009 also impacted on other product lines, including offshore bonds, but these sales falls were partially offset by the continued strength of with-profits sales.

Sales of with-profits bonds of APE £101m for the first nine months were up 36% on the same period in 2008. PruFund was a big draw for savers with over £1bn invested in the fund across its retail range in the last 12 months.

Prudential's individual pensions sales were also strong and at APE £34m were 36% higher than in the first nine months of 2008.

However, corporate pension sales of £156m were 18% lower than for the first nine months of 2008 although growth into existing schemes has remained healthy.

PruProtect also experienced encouraging sales growth for the first nine months following the re-launch of its product range in November 2008.

M&G, Prudential’s asset management arm, was another strong performer, posting £2.51bn total net inflows during Q3, with net retail sales of £1.7bn.

Commenting on the UK results, chief executive Tidjane Thiam says:  “In the UK, our disciplined approach to capital consumption led to retail sales of £531m in the first nine months of the year, down 13% on the same period last year. We remain focused on our two key areas of strength; the with-profits and annuity markets.”

Pru’s total retail sales across all areas rose 10% to £699m in Q3 compared to the same quarter in 2008. However, a fall in wholesale figures of nearly 100%, down to £1m, led to total group insurance figures dropping 9% for the quarter. 

Highpoints globally included the US, where retail sales (APE) for Q3 were the highest in its history at £249m. In Asia, Pru reported its first year on year growth since the second quarter of 2008, with sales up 4% in Q3.

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