18th Aug 2014 13:30
LONDON (Alliance News) - Prudential PLC is to invest about GBP100.0 million over two years on its core systems, new product initiatives and propositions in its UK business, according to a transcript of a call with analysts published on the group's website.
The financial services group, which through Prudential UK focuses on life insurance and pensions, is trying to seize opportunities from what it sees as the UK's savings gap, the concentration of wealth in people aged over 50, the transfer of risk from government and corporates to individuals and a fall in the access of advice for the mass market, as well as changes in made in the UK government's 2014 Budget that put an end to the effective requirement on individuals to buy annuities.
"The ones we have been vocal about and talked about in the past: PruFund ISA, flexible draw-down products, getting onto external platforms. I should say the platform solution, we think, is critical. But actually, it is single-digit millions in terms of it as an investment, so pretty modest," Jackie Hunt, chief executive of Prudential UK & Europe, said.
"And then also just broadening our digital capabilities. We have almost no way in which customers can interact with us on a digital basis. And some new business strain. So I think it is a mix of a very wide range of potential solutions and longevity solutions," Hunt added.
Responding to a question from Bank of America Merrill Lynch's Blair Stewart as to whether a lack of a platform is a draw back, Hunt said that she does not think ownership of a platform is necessary.
"If you look at money, it is moving onto platforms; it is where customers want to deal with us, it is the way in which our advisors want to deal with us," Hunt said. "I do not think we necessarily need to own a platform. We need to have technology and products that can work on various solutions."
Hunt said that Prudential is well positioned to help customers through the changes in the UK market, and said that its product and proposition development programme remains on track.
"If we highlight some of those, we are broadening our retirement income proposition, for example, by developing a flexible drawdown product that has PruFund inside it," Hunt said.
"We are also evolving our existing with-profits product suite and, again, this is in the form of an ISA wrapper. The budget has made ISAs far more attractive products," Hunt added. "That is on track for launch in the first quarter of 2015. Finally we are developing our unique package products. They will fit into the platform market space."
Prudential shares were Monday quoted down 0.3% at 1,416.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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