Wed, 12th Mar 2014
Insurance firm Prudential saw its share price increase significantly on Wednesday after the company reported a massive profits increase. The insurance giant reported a 17% increase in operating profits, which it attributed to strong market growth in the United States and a rapidly expanding middle class audience in emerging markets.
Prudential saw a five percent increase in sales overall, with double digit growth in its Asian markets. It also enjoyed an increase in fee income for its Jackson brand, which it operates in the United States.
Prudential had a difficult time last year after it was fined by regulators over its attempt to buy AIA in 2010. It has managed to shake off the impact of that fine, and is now enjoying steady growth in Asia.
Prudential Chief Executive Tidjan Thiam said that the group was benefiting greatly from the demographics in Asia. He referenced the younger average age in certain parts of Asia as a reason for the company’s growth over there, and also commented on the recent fall in pensions annuities sales in the UK.
Thiam noted that in 2012 sales of individual pensions annuities to men increased dramatically, as men wanted to set their annuities before a new directive from Brussels, which would ban insurance companies from considering gender when setting rates, took effect. Before that directive was put in place, men enjoyed higher annuities than women because of their lower average life expectancy. Now that the rush to fix rates is over, UK sales have fallen back to their previous levels.