20th Apr 2005 07:00
Prudential PLC20 April 2005 Embargo: 07.00 Wednesday 20th April 2005 PRUDENTIAL PLC FIRST QUARTER 2005 NEW BUSINESS RESULTS Good start to the year across all businesses. • Group APE sales of £478 million up 11 per cent on first quarter 2004 • UK & Europe APE sales of £208 million up 12 per cent on first quarter 2004 • Jackson National Life APE sales of £128 million up 9 per cent on first quarter 2004 • Prudential Corporation Asia APE sales of £142 million up 13 per cent on first quarter 2004 • M&G external funds under management of £30.1 billion up 27 per cent on first quarter 2004 • Prudential Corporation Asia investment operations' funds under management of £8.1 billion, up 13 per cent on 2004 All comparisons above and the narrative below are quoted at constant exchangerates (CER). See Notes to Editors for further details. Prudential's Group Finance Director, Philip Broadley, commented: "This is a strong start to the year, continuing the momentum built across theGroup in 2004 with good performances from all our businesses. Double digit sales growth for Prudential UK & Europe included strong sales ofunit-linked bonds and annuities. The partnerships channel saw significantyear-on-year growth and this will be enhanced by further distributionopportunities with St James's Place, Barclays and National Australia Bank. In the US, Jackson National Life's (JNL) total quarterly sales of variableannuities exceeded $1 billion for the first time and contributed to overall APEsales growth of 9 per cent on the first quarter of 2004. In Asia, both Korea and India recorded their highest quarterly APE sales andsales in Malaysia increased significantly. In China we were pleased to announcethree new city licences during the quarter. M&G reported gross inflows of £2.1billion, nearly three times higher than thefirst quarter of 2004. We maintain the positive outlook set out in our preliminary results announcementon 2 March. Our businesses across all regions continue to perform strongly andare well positioned to take advantage of the opportunities in their respectivemarkets." UK and Europe Insurance Operations APE sales for Prudential UK and Europe of £208 million were up 12 per cent onthe first quarter of 2004. This principally reflected strong growth in sales ofunit-linked bonds and annuities. APE sales out-performed the first quarter of last year in each distributionchannel: Direct to Customer up 6 per cent; Business to Business (B2B) up 17 percent; Intermediaries up 8 per cent; and Partnerships up 42 per cent (all figuresexclude the inflows from DWP rebates). Prudential UK is a market leader in annuities. APE sales of individual annuitieswere up 18 per cent (to £53 million) on the first quarter of 2004 due toincreased sales through most distribution channels. Bulk annuities were up 71per cent on 2004 to £24 million which comprised 16 scheme wins. Sales of unit-linked products increased significantly in 2004 and this trendcontinued into 2005 with APE sales of £18 million up 195 per cent on the firstquarter of 2004. This increase more than offset the decline in sales ofwith-profits products from the levels seen in the first quarter of 2004.However, Prudential believes that with-profits continues to be an attractiveinvestment for policyholders when provided by a financially strong andwell-managed fund. Our with-profits fund has delivered a total pre-tax return of20.7 per cent over the last five years while the FTSE 100 fell by 20 per cent.This enabled Prudential UK to maintain annual bonuses and increase policy valuesfor nearly all its 5.5 million with-profits policyholders in 2005. Prudential re-entered the critical illness protection market with guaranteedrates in March 2005. Earlier this month it launched both on-line and telephoneunderwriting across its range of protection products, which will substantiallyreduce the processing time for new business for Independent Financial Advisers(IFAs). Credit Life sales remained strong, up 25 per cent to £20 million on thefirst quarter of 2004. In October 2004 we launched PruHealth, an innovative UK healthcare product thatlinks health and fitness to the cost of medical insurance. As PruHealth is not alife insurance product, its premium income is not reported as new businesssales; for the first quarter of 2005, the gross written premiums were £1million. Support for PruHealth is strong in the IFA channel and its rate ofgrowth is accelerating. Further enhancements to sales processes and greater use of work-site marketingcontributed to an increase in B2B corporate pensions APE sales of 6 per cent (to£37 million) on the first quarter of 2004. DWP rebates decreased 9 per cent on2004 as customers have been encouraged to consider contracting back into thesecond state pension. Sales through the partnerships channel have increased year-on-year as morebusiness was written through new agreements. A further agreement was signed withSt. James's Place in January (for the sale of annuities) and in March, Barclaysannounced its intention to appoint Prudential UK as one of its nominatedmulti-tie product providers. Yesterday, Prudential announced an agreement withNational Australia Bank (NAB) under which NAB will sell Prudential's annuityproducts (on an exclusive basis) and healthcare products through theirClydesdale and Yorkshire Bank networks. Prudential UK has continued to make good progress with multi-tie networks. Inthe first quarter of 2005, it was appointed to the Burns Anderson regulatedmulti-tie panel and by Tenet to work on the design of its multi-tie proposition. Prudential UK has made an encouraging start in 2005. Its new business growth of12 per cent exceeded our expected growth rate for the year of 10 per cent giventhe expectation of UK market growth of 5 per cent. Jackson National Life (JNL) APE sales for the first quarter of £128 million were up 9 per cent on the firstquarter of 2004. Total quarterly sales of variable annuities exceeded $1 billion(£529 million) for the first time. Total retail APE sales of £87 million were inline with the first quarter of 2004. Institutional sales were 37 per cent higherthan the same period last year. Total sales of variable annuities exceeded $1 billion, with particularly strongsales in March of over $400 million (establishing a monthly sales record). JNLremains a top-10 player in the variable annuity market. Its variable annuityassets grew 36 per cent in 2004 compared with industry growth of 12 per cent.The rate of take-up of the fixed account option for this product was 28 percent, compared with 25 per cent in the first quarter of 2004. APE sales of fixed annuities were down 47 per cent on the first quarter of 2004,reflecting the flattened yield curve, which has made rates on short-termcertificates of deposits (CDs) more attractive to customers. Fixed index annuities (note 2) APE sales of £13 million were up 86 per cent onthe first quarter of 2004, reflecting customers' increasing preference for fixedproducts with the potential for higher returns linked to equity indexperformance. APE sales of life products increased to £3 million in the first quarter of 2005.JNL's continued focus on developing its life business through the creation of adedicated distribution team in 2003 has helped generate a significant increasein life sales. The company also entered the variable universal life market inMarch 2004 and introduced its second VUL product in January 2005. We expect to complete the regulatory approval process of the purchase of LifeInsurance Company of Georgia in the second quarter of 2005. Curian Capital, which provides innovative fee-based separately managed accounts,had deposits of £117 million, up 24 per cent over the first quarter of 2004. Inits first full two years of operation, Curian has accumulated US$1,213 million(£642 million) of funds under management. APE sales of institutional products were £41 million, up 37 per cent on thefirst quarter of 2004 reflecting favourable market conditions in this sector. Ingeneral, the market is more active in the first quarter as companies begin toaddress their funding needs for the year. In addition, there was a brief windowin the first quarter of 2005 during which spreads were attractive and we wereable to opportunistically place business. Performance in the first quarter was in line with our expectations for the year.We expect the US market to grow at about 4 per cent in 2005 and JNL to growsales at around twice this rate as current conditions continue to favourcompanies which have a range of variable and fixed annuity product offerings, arelationship-based distribution model and award-winning service. Prudential Corporation Asia Prudential's Asian operations continue to show solid new business growth overalland reflect our focus on building a profitable and sustainable business. APEsales of £142 million were up 13 per cent over the same period last year. Both Korea and India achieved very strong results in the first quarter withrecord quarterly APE sales of £27 million and £18 million respectively. In Koreathis reflects the continuing popularity of the Variable Universal Life productand the development of the tied and general agency channels that arecompensating for increased competition in the direct channel. In India APEgrowth reflects the ongoing building of scale in the operation as agent numbersgrow and geographic coverage increases. In the more established markets, Malaysia had a very good first quarter with APEsales of £12 million, up 50 per cent on the same quarter last year, reflectingsuccessful sales and productivity programmes. Taiwan APE sales were down 25 percent on the first quarter of 2004 as we focus on quality new business ratherthan pursuing volume. Its proportion of unit-linked business increased from 47per cent in the first quarter of 2004 to 54 per cent in the first quarter of2005. Singapore APE sales grew 7 per cent with regular premium business growing10 per cent, reflecting our market leading position in this more profitablesector of the market. Hong Kong APE sales grew 5 per cent driven by continuinggrowth from the bancassurance distribution channel. In China our geographic expansion is progressing and APE sales were up 33 percent over the first quarter of 2004. Prudential's joint venture with ChinaInternational Trust and Investment Corporation (CITIC) is the country's leadingjoint venture in terms of sales and we now have seven city licences, includingthree announced during the quarter in Foshan, Dongguan and Wuhan, as well as agroup life insurance licence. In Japan, sales were slow as our focus remains on strengthening ourbancassurance and Financial Advisory model. Indonesia APE sales were in linewith the first quarter in 2004, as it continues the steady rebuilding ofmomentum following the bankruptcy claim that affected the business for part oflast year. APE sales of Prudential Corporation Asia's 'Other' operationsprimarily reflected sales in Vietnam where industry growth has softened over thelast year following the initial growth since the liberalisation of the market. Total investment product funds under management are £8.1 billion, up 13 per centon 2004. Net investment product inflows were £209 million, down 31 per cent onthe same quarter in 2004. Strong net inflows in Japan of £365 million, and inKorea of £314 million were partially offset by net outflows in Taiwan of £163million where industry-wide concerns over the liquidity of some bond funds haveunsettled the market. In India, net outflows of £231 million reflect anticipatedend of year tax planning by many unit holders. We are confident of our ability to grow strongly and profitably in Asia: theopportunities in our newer markets, coupled with the strength of our largeroperations, should enable us to accelerate our level of sales growth in 2005. M&G M&G has made a strong start to the year with overall gross fund inflows in thequarter of £2.1 billion, nearly three times greater than the previous year.Overall net fund inflows were £1.3 billion, a significant improvement on thefirst quarter of last year when there were net outflows of £886 million. Gross fund inflows within M&G's retail businesses more than doubled to £801million, resulting in net fund inflows of £220 million against a small netoutflow last year. This improvement was due to increased equity and propertysales in the UK and strong growth from its international businesses. M&G's institutional businesses delivered gross fund inflows of £1.3 billion,boosted by a one-off contribution of £967 million from Prudential PropertyInvestment Managers (PruPIM). This related to the transfer of 50% ofPrudential's economic interests in three UK shopping centres into new externalvehicles which PruPIM will continue to manage. Net inflows of £1.0 billioncompare to net outflows of £879 million last year when the figures reflected asingle large segregated withdrawal following a change of strategy by the client. Egg Egg will announce its first quarter 2005 results on 27 April. -ENDS- Enquiries Rebecca Burrows, Group Communications Director 020 7548 3537 Media Investors/AnalystsClare Staley 020 7548 3719 Marina Lee-Steere 020 7548 3511Joanne Davidson 020 7548 3708 Mike Kempster 020 7548 3823 Notes to Editors 1. There will be a conference call today for wire services hosted by Philip Broadley, Group Finance Director, at 7.45am. Dial-in telephone number: +44 (0) 20 8609 0205. Pin code: 155439# for access to the call. 2. Equity-Indexed Annuities (EIAs) are now referred to as Fixed Index Annuities (FIAs), a term that more accurately describes the product design and its benefits and features. 3. Sales for overseas operations have been reported using average exchange rates as shown in the attached schedules. Commentary is given on the results on a constant exchange rate (CER) basis. The two bases are compared in the table below. 4. Annual premium equivalent (APE) sales comprise regular premium sales plus one-tenth of single premium insurance sales. Prudential plc, a company incorporated and with its principal place of businessin the United Kingdom, and its affiliated companies constitute one of theworld's leading financial services groups. It provides insurance and financialservices directly and through its subsidiaries and affiliates throughout theworld. It has been in existence for over 150 years and has £187 billion inassets under management, as at 31 December 2004. Prudential plc is notaffiliated in any manner with Prudential Financial, Inc, a company whoseprincipal place of business is in the United States of America. Forward-Looking Statements This statement may contain certain "forward-looking statements" with respect tocertain of Prudential's plans and its current goals and expectations relating toits future financial condition, performance, results, strategy and objectives.Statements containing the words "believes", "intends", "expects", "plans", "seeks" and "anticipates", and words of similar meaning, are forward-looking. Bytheir nature, all forward-looking statements involve risk and uncertaintybecause they relate to future events and circumstances which are beyondPrudential's control including among other things, UK domestic and globaleconomic and business conditions, market related risks such as fluctuations ininterest rates and exchange rates, and the performance of financial marketsgenerally; the policies and actions of regulatory authorities, the impact ofcompetition, inflation, and deflation; experience in particular with regard tomortality and morbidity trends, lapse rates and policy renewal rates; thetiming, impact and other uncertainties of future acquisitions or combinationswithin relevant industries; and the impact of changes in capital, solvency oraccounting standards, and tax and other legislation and regulations in thejurisdictions in which Prudential and its affiliates operate. This may forexample result in changes to assumptions used for determining results ofoperations or re-estimations of reserves for future policy benefits. As aresult, Prudential's actual future financial condition, performance and resultsmay differ materially from the plans, goals, and expectations set forth inPrudential's forward-looking statements. Prudential undertakes no obligation toupdate the forward-looking statements contained in this statement or any otherforward-looking statements it may make. Schedule 1A - Constant Exchange Rates PRUDENTIAL PLC - NEW BUSINESS - QUARTER 1 2005 TOTAL INSURANCE AND INVESTMENT NEW BUSINESS UK & Europe US (1a) Asia (1a) Total 2005 Q1 2004 Q1 +/- (%) 2005 Q1 2004 Q1 +/- (%) 2005 Q1 2004 Q1 +/- (%) 2005 Q1 2004 Q1 +/- (%) YTD YTD YTD YTD YTD YTD YTD YTD £m £m £m £m £m £m £m £m Total Insurance 1,713 1,481 16% 1,256 1,157 9% 278 264 5% 3,247 2,902 12%ProductsTotal Investment 2,092 722 190% - - - 4,635 5,046 (8%) 6,727 5,768 17%Products - GrossInflows (2) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Group Total 3,805 2,203 73% 1,256 1,157 9% 4,913 5,310 (7%) 9,974 8,670 15% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) 2005 Q1 2004 Q1 +/- (%) 2005 Q1 2004 Q1 +/- (%) 2005 Q1 2004 Q1 +/- (%) 2005 Q1 2004 Q1 +/- (%) YTD YTD YTD YTD YTD YTD YTD YTD £m £m £m £m £m £m £m £m UK Insurance OperationsDirect to Customer:Individual 4 3 33% 2 2 0% 6 5 20% 2 2 0%Pensions Life - With 2 3 (33%) - - - 2 3 (33%) 0 0 0%Profit BondLife - Other - - - - - - - - - - - -Individual 167 151 11% - - - 167 151 11% 17 15 13%Annuities ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 173 157 10% 2 2 0% 175 159 10% 19 18 6%DWP Rebates 234 252 (7%) - - - 234 252 (7%) 23 25 (8%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 407 409 (0%) 2 2 0% 409 411 (0%) 43 43 0% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Business toBusiness:Corporate Pensions 56 40 40% 31 31 0% 87 71 23% 37 35 6%Individual 49 48 2% - - - 49 48 2% 5 5 0%AnnuitiesBulk Annuities 215 139 55% - - - 215 139 55% 22 14 57% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 320 227 41% 31 31 0% 351 258 36% 63 54 17% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Intermediated Distribution :Individual 21 16 31% 5 5 0% 26 21 24% 7 7 0%Pensions Corporate 10 65 (85%) 2 2 0% 12 67 (82%) 3 9 (67%)Pensions Life - With 33 54 (39%) - - - 33 54 (39%) 3 5 (40%)Profit Bond Life - Other 226 142 59% - - - 226 142 59% 23 14 64%Bond Life - Other - - - 1 1 0% 1 1 0% 1 1 0%Individual 269 228 18% - - - 269 228 18% 27 23 17%Annuities ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 559 505 11% 8 8 0% 567 513 11% 64 59 8%DWP Rebates 80 92 (13%) - - - 80 92 (13%) 8 9 (11%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 639 597 7% 8 8 0% 647 605 7% 72 68 6% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Partnerships :Life - With Profit Bond - 1 - - - - - 1 - - 0 -Life - Other 198 164 21% - - - 198 164 21% 20 16 25%Individual 44 23 91% - - - 44 23 91% 4 2 100%AnnuitiesBulk Annuities 25 - - - - - 25 - - 3 - - ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 267 188 42% - - - 267 188 42% 27 19 42% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total :Individual 25 19 32% 7 7 0% 32 26 23% 10 9 11%Pensions Corporate 66 105 (37%) 33 33 0% 99 138 (28%) 40 44 (9%)Pensions Life - With 35 58 (40%) - - - 35 58 (40%) 4 6 (33%)Profit Bond Life - Other 226 142 59% - - - 226 142 59% 23 14 64%Bond Life - Other 198 164 21% 1 1 0% 199 165 21% 21 17 24%Individual 529 450 18% - - - 529 450 18% 53 45 18%AnnuitiesBulk Annuities 240 139 73% - - - 240 139 73% 24 14 71% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 1,319 1,077 22% 41 41 0% 1,360 1,118 22% 173 149 16%DWP Rebates 314 344 (9%) - - - 314 344 (9%) 31 34 (9%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total UK 1,633 1,421 15% 41 41 0% 1,674 1,462 15% 204 183 11%Insurance Operations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----European InsuranceOperations : (1a)Insurance 39 19 105% - - - 39 19 105% 4 2 100%Products ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total European 39 19 105% - - - 39 19 105% 4 2 100%Insurance Operations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total UK & 1,672 1,440 16% 41 41 0% 1,713 1,481 16% 208 185 12%European Insurance Operations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----US InsuranceOperations : (1a)Fixed Annuities 165 323 (49%) - - - 165 323 (49%) 17 32 (47%)Fixed Index 127 69 84% - - - 127 69 84% 13 7 86%AnnuitiesVariable 548 460 19% - - - 548 460 19% 55 46 20%Annuities Life 4 1 300% 2 2 0% 6 3 100% 3 2 50% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 844 853 (1%) 2 2 0% 846 855 (1%) 87 87 0%Retail Guaranteed 50 18 178% - - - 50 18 178% 5 2 150%Investment ContractsGIC - Medium 360 284 27% - - - 360 284 27% 36 28 29%Term Note ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total US 1,254 1,155 9% 2 2 0% 1,256 1,157 9% 128 117 9%Insurance Operations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Asian Insurance Operations : (1a)China 1 3 (67%) 4 3 33% 5 6 (17%) 4 3 33%Hong Kong 52 50 4% 17 16 6% 69 66 5% 22 21 5%India (@26%) (6) 1 1 0% 18 11 64% 19 12 58% 18 11 64%Indonesia 15 12 25% 7 8 (13%) 22 20 10% 9 9 0%Japan 5 3 67% 1 2 (50%) 6 5 20% 2 2 0%Korea 4 20 (80%) 27 14 93% 31 34 (9%) 27 16 69%Malaysia 2 2 0% 12 8 50% 14 10 40% 12 8 50%Singapore 45 50 (10%) 11 10 10% 56 60 (7%) 16 15 7%Taiwan 24 10 140% 22 31 (29%) 46 41 12% 24 32 (25%)Other (4) 2 2 0% 8 8 0% 10 10 0% 8 8 0% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total Asian 151 153 (1%) 127 111 14% 278 264 5% 142 126 13%Insurance Operations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Group Total 3,077 2,748 12% 170 154 10% 3,247 2,902 12% 478 429 11% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Schedule 1B - Actual Exchange Rates PRUDENTIAL PLC - NEW BUSINESS - QUARTER 1 2005 TOTAL INSURANCE AND INVESTMENT NEW BUSINESS UK & Europe US (1b) Asia (1b) Total 2005 Q1 2004 Q1 +/- (%) 2005 Q1 2004 Q1 +/- (%) 2005 Q1 2004 Q1 +/- (%) 2005 Q1 2004 Q1 +/- (%) YTD YTD YTD YTD YTD YTD YTD YTD £m £m £m £m £m £m £m £m Total Insurance 1,713 1,481 16% 1,256 1,190 6% 278 264 5% 3,247 2,935 11%ProductsTotal Investment 2,092 722 190% - - - 4,635 4,909 (6%) 6,727 5,631 19%Products - GrossInflows (2) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Group Total 3,805 2,203 73% 1,256 1,190 6% 4,913 5,173 (5%) 9,974 8,566 16% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) 2005 Q1 2004 Q1 +/- (%) 2005 Q1 2004 Q1 +/- (%) 2005 Q1 2004 Q1 +/- (%) 2005 Q1 2004 Q1 +/- (%) YTD YTD YTD YTD YTD YTD YTD YTD £m £m £m £m £m £m £m £m UK Insurance Operations :Direct toCustomer:Individual 4 3 33% 2 2 0% 6 5 20% 2 2 0%PensionsLife - With 2 3 (33%) - - - 2 3 (33%) 0 0 0%Profit BondLife - Other - - - - - - - - - - - -Individual 167 151 11% - - - 167 151 11% 17 15 13%Annuities ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 173 157 10% 2 2 0% 175 159 10% 19 18 6%DWP Rebates 234 252 (7%) - - - 234 252 (7%) 23 25 (8%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 407 409 (0%) 2 2 0% 409 411 (0%) 43 43 0% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Business toBusiness:Corporate 56 40 40% 31 31 0% 87 71 23% 37 35 6%PensionsIndividual 49 48 2% - - - 49 48 2% 5 5 0%PensionsBulk Annuities 215 139 55% - - - 215 139 55% 22 14 57% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 320 227 41% 31 31 0% 351 258 36% 63 54 17% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Intermediated Distribution :Individual 21 16 31% 5 5 0% 26 21 24% 7 7 0%PensionsCorporate Pensions 10 65 (85%) 2 2 0% 12 67 (82%) 3 9 (67%)Life - With 33 54 (39%) - - - 33 54 (39%) 3 5 (40%)Profit BondLife - Other Bond 226 142 59% - - - 226 142 59% 23 14 64%Life - Other - - - 1 1 0% 1 1 0% 1 1 0%Individual 269 228 18% - - - 269 228 18% 27 23 17%Annuities ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 559 505 11% 8 8 0% 567 513 11% 64 59 8%DWP Rebates 80 92 (13%) - - - 80 92 (13%) 8 9 (11%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 639 597 7% 8 8 0% 647 605 7% 72 68 6% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Partnerships :Life - With - 1 - - - - - 1 - - 0 -Profit BondLife - Other 198 164 21% - - - 198 164 21% 20 16 25%Individual 44 23 91% - - - 44 23 91% 4 2 100%AnnuitiesBulk Annuities 25 - - - - - 25 - - 3 - - ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 267 188 42% - - - 267 188 42% 27 19 42% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total :Individual 25 19 32% 7 7 0% 32 26 23% 10 9 11%PensionsCorporate Pensions 66 105 (37%) 33 33 0% 99 138 (28%) 40 44 (9%)Life - With 35 58 (40%) - - - 35 58 (40%) 4 6 (33%)Profit BondLife - Other Bond 226 142 59% - - - 226 142 59% 23 14 64%Life - Other 198 164 21% 1 1 0% 199 165 21% 21 17 24%Individual 529 450 18% - - - 529 450 18% 53 45 18%AnnuitiesBulk Annuities 240 139 73% - - - 240 139 73% 24 14 71% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 1,319 1,077 22% 41 41 0% 1,360 1,118 22% 173 149 16%DWP Rebates 314 344 (9%) - - - 314 344 (9%) 31 34 (9%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total UK 1,633 1,421 15% 41 41 0% 1,674 1,462 15% 204 183 11%InsuranceOperations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----European InsuranceOperations : (1b)Insurance Products 39 19 105% - - - 39 19 105% 4 2 100% Total European 39 19 105% - - - 39 19 105% 4 2 100%InsuranceOperations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total UK 1,672 1,440 16% 41 41 0% 1,713 1,481 16% 208 185 12%& EuropeanInsuranceOperations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----US Insurance Operations : (1b)Fixed Annuities 165 332 (50%) - - - 165 332 (50%) 17 33 (48%)Fixed Index 127 71 79% - - - 127 71 79% 13 7 86%AnnuitiesVariable Annuities 548 473 16% - - - 548 473 16% 55 47 17%Life 4 1 300% 2 2 0% 6 3 100% 3 2 50% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total Retail 844 877 (4%) 2 2 0% 846 879 (4%) 87 90 (3%)Guaranteed 50 19 163% - - - 50 19 163% 5 2 150%InvestmentContractsGIC - Medium 360 292 23% - - - 360 292 23% 36 29 24%Term Note ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total US 1,254 1,188 6% 2 2 0% 1,256 1,190 6% 128 121 6%Insurance Operations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Asian Insurance Operations : (1b)China 1 3 (67%) 4 3 33% 5 6 (17%) 4 3 33%Hong Kong 52 52 0% 17 16 6% 69 68 1% 22 21 5%India (@26%) (6) 1 1 0% 18 11 64% 19 12 58% 18 11 64%Indonesia 15 13 15% 7 9 (22%) 22 22 0% 9 10 (10%)Japan 5 3 67% 1 2 (50%) 6 5 20% 2 2 0%Korea 4 18 (78%) 27 13 108% 31 31 0% 27 15 80%Malaysia 2 2 0% 12 8 50% 14 10 40% 12 8 50%Singapore 45 50 (10%) 11 10 10% 56 60 (7%) 16 15 7%Taiwan 24 10 140% 22 30 (27%) 46 40 15% 24 31 (23%)Other (4) 2 2 0% 8 8 0% 10 10 0% 8 8 0% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total Asian 151 154 (2%) 127 110 15% 278 264 5% 142 125 14%InsuranceOperations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Group Total 3,077 2,782 11% 170 153 11% 3,247 2,935 11% 478 431 11% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Schedule 2 PRUDENTIAL PLC - NEW BUSINESS - QUARTER 1 2005 INVESTMENT OPERATIONS Opening FUM Gross inflows Redemptions Net inflows Other Market & Net movement Closing FUM movements currency in FUM movements £m £m £m £m £m £m £m £m2005 M&GRetail 11,613 801 (581) 220 - 33 253 11,866Institutional (5) 17,092 1,291 (251) 1,040 69 (6) 1,103 18,195 ----- ----- ----- ----- ----- ----- ----- -----Total M&G 28,705 2,092 (832) 1,260 69 27 1,356 30,061 ----- ----- ----- ----- ----- ----- ----- ----- AsiaIndia 2,144 2,699 (2,930) (231) (21) 47 (205) 1,939Taiwan 1,797 730 (893) (163) - 50 (113) 1,684Korea 1,426 672 (358) 314 (19) 78 373 1,799Japan 1,638 430 (65) 365 - (71) 294 1,932Other Mutual Fund 583 86 (174) (88) - (14) (102) 481Operations ----- ----- ----- ----- ----- ----- ----- -----Total Asian Mutual 7,588 4,617 (4,420) 197 (40) 90 247 7,835Fund Operations ----- ----- ----- ----- ----- ----- ----- -----Hong Kong MPF 244 18 (6) 12 - (1) 11 255Products (@36%) (6) ----- ----- ----- ----- ----- ----- ----- -----Total Asian 7,832 4,635 (4,426) 209 (40) 89 258 8,090InvestmentOperations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total Investment 36,537 6,727 (5,258) 1,469 29 116 1,614 38,151Products ----- ----- ----- ----- ----- ----- ----- ----- Opening FUM Gross inflows Redemptions Net inflows Other Market & Net movement Closing FUM movements currency in FUM movements £m £m £m £m £m £m £m £m2004 M&GRetail 10,144 357 (364) (7) - 100 93 10,237Institutional (5) 14,048 365 (1,244) (879) 98 154 (627) 13,421 ----- ----- ----- ----- ----- ----- ----- -----Total M&G 24,192 722 (1,608) (886) 98 254 (534) 23,658 ----- ----- ----- ----- ----- ----- ----- -----Asia India 2,049 2,143 (2,326) (183) (20) 39 (164) 1,885Taiwan 2,666 1,890 (1,717) 173 - 46 219 2,885Korea 933 618 (459) 159 (5) (24) 130 1,063Japan 411 103 (29) 74 - 2 76 487Other Mutual Fund 341 138 (68) 70 - 10 80 421Operations ----- ----- ----- ----- ----- ----- ----- -----Total Asian Mutual 6,400 4,892 (4,599) 293 (25) 73 341 6,741Fund Operations ----- ----- ----- ----- ----- ----- ----- -----Hong Kong MPF 196 17 (5) 12 - (2) 10 206Products(@36%)(6) ----- ----- ----- ----- ----- ----- ----- -----Total Asian 6,596 4,909 (4,604) 305 (25) 71 351 6,947InvestmentOperations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total Investment 30,788 5,631 (6,212) (581) 73 325 (183) 30,605Products ----- ----- ----- ----- ----- ----- ----- ----- Opening FUM Gross inflows Redemptions Net inflows Other Market & Net movement Closing FUM movements currency in FUM movements % % % % % % % %2005 movementrelative to 2004 M&GRetail 14% 124% (60%) 3243% - (67%) 172% 16%Institutional (5) 22% 254% 80% 218% (30%) (104%) 276% 36% ----- ----- ----- ----- ----- ----- ----- -----Total M&G 19% 190% 48% 242% (30%) (89%) 354% 27% ----- ----- ----- ----- ----- ----- ----- -----AsiaIndia 5% 26% (26%) (26%) (5%) 21% (25%) 3%Taiwan (33%) (61%) 48% (194%) - 9% (152%) (42%)Korea 53% 9% 22% 97% (280%) 425% 187% 69%Japan 299% 317% (124%) 393% - (3650%) 287% 297%Other Mutual Fund 71% (38%) (156%) (226%) - (240%) (228%) 14%Operations ----- ----- ----- ----- ----- ----- ----- -----Total Asian Mutual 19% (6%) 4% (33%) (60%) 23% (28%) 16%Fund Operations ----- ----- ----- ----- ----- ----- ----- -----Hong Kong MPF 24% 6% (20%) 0% - 50% 10% 24%Products (@ 36%)(6) ----- ----- ----- ----- ----- ----- ----- -----Total Asian 19% (6%) 4% (31%) (60%) 25% (26%) 16%InvestmentOperations ----- ----- ----- ----- ----- ----- ----- -----Total Investment 19% 19% 15% 353% (60%) (64%) 982% 25%Products ----- ----- ----- ----- ----- ----- ----- ----- US (7) 2005 Q1 2004 Q1 +/- (%) YTD YTD £m £mCurian CapitalExternal Funds 642 237 171%under Administration ----- ----- ----- Schedule 3 PRUDENTIAL PLC - NEW BUSINESS - QUARTER 1 2005 VERSUS QUARTER 4 2004 (8) INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) Q1 2005 Q4 2004 +/- (%) Q1 2005 Q4 2004 +/- (%) Q1 2005 Q4 2004 +/- (%) Q1 2005 Q4 2004 +/-(%) £m £m £m £m £m £m £m £m UK InsuranceOperations :Direct to Customer:Individual 4 2 100% 2 2 0% 6 4 50% 2 2 0%PensionsLife - With Profit 2 2 0% - - - 2 2 0% 0 0 -BondIndividual 167 166 1% - - - 167 166 1% 17 17 0%Annuities ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 173 170 2% 2 2 0% 175 172 2% 19 19 0%DWP Rebates 234 13 1700% - - - 234 13 1700% 23 1 2200% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 407 183 122% 2 2 0% 409 185 121% 43 20 115% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Business toBusiness:Corporate Pensions 56 45 24% 31 33 (6%) 87 78 12% 37 38 (3%)Individual 49 68 (28%) - - - 49 68 (28%) 5 7 (29%)AnnuitiesBulk 215 222 (3%) - - - 215 222 (3%) 22 22 0%Annuities ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 320 335 (4%) 31 33 (6%) 351 368 (5%) 63 67 (6%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- IntermediatedDistribution :Individual 21 10 110% 5 1 400% 26 11 136% 7 2 250%PensionsCorporate 10 7 43% 2 2 0% 12 9 33% 3 3 0%PensionsLife - With 33 43 (23%) - - - 33 43 (23%) 3 4 (25%)Profit BondLife - 226 250 (10%) - - - 226 250 (10%) 23 25 (8%)Other BondLife - - - - 1 1 0% 1 1 0% 1 1 0%OtherIndividual 269 326 (17%) - - - 269 326 (17%) 27 33 (18%)Annuities ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 559 636 (12%) 8 4 100% 567 640 (11%) 64 68 (6%)DWP 80 (3) 2767% - - - 80 (3) 2767% 8 (0) -Rebates ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 639 633 1% 8 4 100% 647 637 2% 72 67 7% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Partnerships :Life - With - - - - - - - - - - - - Profit BondLife - 198 214 (7%) - - - 198 214 (7%) 20 21 (5%)OtherIndividual 44 53 (17%) - - - 44 53 (17%) 4 5 (20%)AnnuitiesBulk 25 1,108 (98%) - - - 25 1,108 (98%) 3 111 (97%)Annuities ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 267 1,375 (81%) - - - 267 1,375 (81%) 27 138 (80%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total :Individual 25 12 108% 7 3 133% 32 15 113% 10 4 150%PensionsCorporate 66 52 27% 33 35 (6%) 99 87 14% 40 40 0%Pensions Life - 35 45 (22%) - - - 35 45 (22%) 4 5 (20%)With ProfitBondLife - 226 250 (10%) - - - 226 250 (10%) 23 25 (8%)Other BondLife - 198 214 (7%) 1 1 0% 199 215 (7%) 21 22 (5%)OtherIndividual 529 613 (14%) - - - 529 613 (14%) 53 61 (13%)AnnuitiesBulk 240 1,330 (82%) - - - 240 1,330 (82%) 24 133 (82%)Annuities ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 1,139 2,516 (48%) 41 39 5% 1,360 2,555 (47%) 173 291 (41%)DWP Rebates 314 10 3040% - - - 314 10 3040% 31 1 3000% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total UK 1,633 2,526 (35%) 41 39 5% 1,674 2,565 (35%) 204 292 (30%)InsuranceOperations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----European InsuranceOperations : (8)Insurance 39 18 117% - 1 - 39 19 105% 4 3 33% Products ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 39 18 117% - 1 - 39 19 105% 4 3 33% European InsuranceOperations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total UK 1,672 2,544 (34%) 41 40 3% 1,713 2,584 (34%) 208 294 (29%)& EuropeanInsuranceOperations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----US InsuranceOperations : (8)Fixed 165 282 (41%) - - - 165 282 (41%) 17 28 (39%)Annuities Fixed Index 127 136 (7%) - - - 127 136 (7%) 13 14 (7%)AnnuitiesVariable 548 492 11% - - - 548 492 11% 55 49 12%AnnuitiesLife 4 6 (33%) 2 3 (33%) 6 9 (33%) 3 4 (25%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Sub-total 844 916 (8%) 2 3 (33%) 846 919 (8%) 87 95 (8%)Retail Guaranteed 50 74 (32%) - - - 50 74 (32%) 5 7 (29%)InvestmentContractsGIC - 360 48 650% - - - 360 48 650% 36 5 620%Medium TermNote ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Total US 1,254 1,038 21% 2 3 (33%) 1,256 1,041 21% 128 107 20%Related Shares:
Prudential