26th Oct 2005 07:06
Prudential PLC26 October 2005 Embargo: 7.00am Wednesday 26th October 2005 PRUDENTIAL PLC THIRD QUARTER 2005 NEW BUSINESS RESULTS AND GROUP UPDATE For the first nine months of the year: • Total Group Insurance sales of £10.8 billion, up 33 per cent on 2004 • Total Group Insurance APE sales of £1.6 billion, up 27 per cent on 2004 • Jackson National Life's (JNL) APE sales of £401 million, up 17 per cent on 2004 • APE sales at Prudential Corporation Asia of £508 million, up 27 per cent on 2004 • Prudential UK and Europe APE sales of £700 million, up 34 per cent on 2004 • M&G had record gross fund inflows of £5.6 billion, up 62 per cent on 2004 Group Update • Clear articulation of Group strategy built on maximising shareholder value through mainly organic growth in US, Asia and UK • Focus on becoming a leader across the three regions in retirement services, in addition to life insurance and fund management • JNL is a key part of our plans to achieve a leading position in retirement services in the US: increased remittances from JNL to Group • Asia has sufficient funding to exploit in full the growth opportunities in the region, while remaining on track to become cash positive in 2006 • We have three strong UK franchises, but there are opportunities for cost synergies and potential revenue benefits from close collaboration • Egg retained with important role in this broader UK strategy • Well placed in fund management globally to capitalise on increasing appetite for transparent investment products, access to more global products and the continuing rise of open architecture platforms • Capital and cash to fund organic growth over the medium term, within our current and developing balance sheet. Commenting, Mark Tucker, Group Chief Executive said: "All our businesses are showing strong growth and these results are a cleardemonstration of the momentum that the Group has built up. They confirm that ourbusinesses are in robust health and the prospects are positive. "JNL's total APE sales were up 17 per cent, and within that retail sales for thenine months were £308 million - that's up 14 per cent on 2004. Improved variableand fixed index annuity sales were partially offset by decreased fixed annuitysales. "In Asia, we've followed a strong second quarter with a very good third quarter- a quarter that's up 32 per cent on the same period last year. Sales of moreprofitable regular premium products now represent 89 per cent of APE sales. "In the UK, growth has been driven mainly by strong sales of unit-linked bondsand bulk annuities. Competition has intensified in some areas in the thirdquarter, particularly in protection and in elements of the individual annuitymarket. Despite this, we remain confident that we will achieve our forecast of10 per cent APE growth in 2005. "M&G, supported by excellent investment performance had record gross fundinflows for the nine months of £5.6 billion - an increase of 62 per cent on thesame period last year. Net fund inflows increased 343 per cent to £2.7 billionfor the year to date. "Egg reported separately today and their results represent a solid performanceat a time when the unsecured lending market remains highly competitive." Group Update Mark Tucker also provided an update on the future direction of the Group. Hesaid: "The Group has undertaken a comprehensive review of retail financial servicesmarkets in all major geographies, not just Prudential home territories."We have one clear standard that we use to guide all of our strategy decisions -the choices we make and the actions we take must consistently generatesustainable value for our shareholders. And our actions must achieve the optimumbalance between present and future growth and profitability. "Taking a broader view has, in many areas, confirmed the existing strategiesPrudential has been following as sound. However we see a need, looking to thefuture to target a broader spectrum of opportunity than just life insurance -important and profitable though we expect that sector to be for us." JNL is a highly successful and well-positioned participant in a market in whichwe want to be powerful. We see the US as a very important part of the Group'splans to achieve a leading position in retirement services internationally. As "Baby Boomers" retire and shift their focus from asset accumulation to incomedistribution, one of JNL's main aims will be to capture a proportion of theseflows - it has all the attributes to succeed. With an emphasis on sales of lowcapital intensive variable annuity products, solid operating results and stronginvestment portfolio performance, JNL is capable of self-generating the capitalnecessary to support its future growth at our required returns and return agrowing remittance to the centre. Asia has been the main engine for growth in the Group in recent years and wehave no intention of restricting growth in Asia to a level lower than that whichwe consider commercially optimum and sustainable. We can meet our challenginggrowth targets and do so within our stated aim of turning cash positive from2006. The strategy will continue to be to grow primarily by organic means in allmarkets, but with particular focus on China, Taiwan, Korea and India.To drive this forward, Mark Norbom, Chief Executive of Prudential CorporationAsia, recently announced a number of new roles and enhanced responsibilitiesacross the region. In the UK, the Group has three very strong franchises to build on - M&Gcontinues both to deliver top tier investment performance and accelerateprofitability, Egg has demonstrated the power to build a large-scale "sticky"customer base of over three million and a very powerful consumer brand, whileour UK insurance operations continue to deliver against its growth and valuetargets. Although each of the businesses will continue to target growth in its ownsector, we see opportunities for greater collaboration allowing us to capitaliseon the strong positions we have in different areas of the market. We have decided to retain and develop Egg. The potential advantages that we canget from owning Egg make it clear that retaining it is the right decision. Itfits in with our objective of generating more value for our customers andshareholders. There are four key reasons behind this decision. Egg has built a strong customerfranchise with over 3 million younger, more affluent customers - and thesecustomers are a good and very different complement to Prudential's multi-millionUK customers. Second, is its brand. Next, Egg's direct distribution model hassupported upwards of 20 per cent compound growth since 2000. In a world ofincreasing intermediation, we believe that maintaining a direct distributioncapability remains very important. Finally, Egg also provides the expertise andinfrastructure as our entry point into the highly profitable personal savingsand loans market. The short-term payback and the lower capital-intensive lendingand deposit products are also an important complement to our longer-termcapital-intensive retirement offering in the UK. Cost benefit can be won through managing administration and IT infrastructuremore closely and by seeking to coordinate our marketing efforts where this makessense. Revenue opportunities are a potential prize as we work through how bestto add value to our millions of Prudential customers by offering a wider rangeof retail financial services products, banking and loan products manufactured byEgg and extremely attractive medium to long-term savings products manufacturedby M&G. We are in the process of a detailed review of how best to realise thesesynergies. We will be considering whether there is a financial and commercialcase for bringing Egg fully into the Group through a share exchange or whetherto retain the existing structure. No decision has been made as yet. Prudential has three excellent asset management businesses. We anticipate anincreasing appetite for transparent investment products, access to more globalproducts and a continuing rise in open architecture platforms plus a rapidlyexpanding role for cross-border sales off a common investment platform. As aresult of our performance, brand and distinctive investment culture, we areexceptionally well-placed to capitalise on these factors. There are material synergies for us to act on. We have identified three mainareas where there are material cost savings from working across the businessunits. These are capital management, risk management and in the Group's ITinfrastructure. For example, work underway on a single global IT infrastructureshould provide a saving of £20-25 million a year. Capital management is at the centre of the Group agenda. We have taken a veryhard look at where our capital is deployed. Our performance and our efforts toimprove capital efficiency, have yielded significant improvements over the lastyear. Over the medium term, we have the capital and cash to fund organic growth withinour current and developing balance sheet. There are also further options toincrease our capacity in the future through debt and alternative capitalsources. Mark Tucker concluded: "Prudential is a successful business and we will continue to build shareholdervalue. We're going to sustain the geographical spread that has stood Prudentialin such good stead over the last decade. "We'll continue to build market leading franchises in the US and Asia and buildon our strong positions in the UK. We'll do that by organic growth and bybuilding on our proven strengths and in particular we'll take advantage of theglobal 'retirement financing' opportunity and our strong life insurance and fundmanagement businesses. "Alongside our ambition to become a leading player in retirement services, we'llleverage our capabilities and assets in all related financial service marketswhere we are confident we have a basis for advantage." Update on Group Capital and Cashflow Philip Broadley, Group Finance Director, also provided an update on Groupcapital and cashflow. He said: "One of the benefits of the Group's present structure and operations is thediversification benefit we get from the spread of risks we've taken on. Usingour internal capital model, our gross capital requirement of £3.7 billion isreduced by over £1 billion, or about 30 per cent because of the benefits ofdiversification across the Group. "As at 31 December 2004, as previously reported, Prudential had a surplus of£845 million on the Financial Conglomerates' Directive basis, which we expect tobe broadly maintained at the end of 2005." Taiwan Philip Broadley also gave a summary of the Group's in-force insuranceliabilities in Taiwan. Prudential's in-force business in Taiwan includes traditional whole of lifepolicies where the premium rates have been set by the regulator at differentpoints in time for the industry as a whole. Premium rates were set to give aguaranteed minimum sum assured on death and a guaranteed surrender value onearly surrender based on prevailing interest rates at the time of policy issue.Premium rates also included allowances for mortality and expenses. Guaranteeshave fallen over time as interest rates have reduced from a high of 8 per centto levels of around 2 per cent today. The current low level of bond ratesavailable in Taiwan gives rise to a negative spread against the majority ofthese policies. The current cash costs of funding in-force negative spread in Taiwan is around£30 million a year. With planned growth, Taiwan is expected to become cashpositive during 2010 even if rates were to stay unchanged. In line with our strategy to develop the Taiwan business away from traditionalbusiness, the current mix of new business in Taiwan is 78 per cent unit-linkedand protection. Interest rates have little effect on new business profitabilityand a 100 basis points fall in interest rates would reduce the new businessmargin in Taiwan by less than two percentage points. Interest rate risk in Taiwan is allowed for within our economic capitalmodelling on a stochastic basis. This capital is held in central funds and isnot required as local capital in Taiwan. For regulatory capital purposes the FSA has agreed that we should modify thecalculation so that the capital requirement in Taiwan under the FinancialConglomerates' Directive can be determined on an economic capital basis thatreflects the nature of our in-force liabilities in Taiwan. In achieved profits reporting at the 2005 half year we assumed that Taiwanesebond rates, currently at around 2 per cent, will trend to a long-term assumptionof 5.5 per cent by 31 December 2012. Allowance is made for the mix of assets inthe fund, our future investment strategy and the market value depreciation ofbonds already held by the fund as yields rise to the assumed long-term yields.At the half year this resulted in an assumed Fund Earned Rate that trends from2.3 per cent to 5.8 per cent by 31 December 2013. There is a slight decline inthe Fund Earned Rate in the first few years as the depreciation of long bondsexceeds the corresponding income pick up as rates rise. Taiwan's achieved profits embedded value at the end of 2004 was £153 millionwith sensitivities to bond rates as follows: •a 100 basis point fall in starting bond rates would reduce embedded value by £84 million •a 100 basis point increase in starting bond rates would increase embedded value by £70 million •a 100 basis point parallel decrease in bond rates with an equivalent adjustment to the risk discount rate would reduce embedded value by £204 million •a 100 basis point parallel increase in bond rates with an equivalent adjustment to the risk discount rate would increase embedded value by £148 million Prudential restated its 2004 year end achieved profits results to reflectEuropean Embedded Value (EEV) principles on 2 June 2005. In these restatementsthe capital allocated to Asia was increased in line with the increase ineconomic capital and resulted in a charge of £269 million to embedded value.Prudential will adopt EEV as its Supplementary Reporting basis for its 2005 yearend reporting. EEV embedded value has been established using a trended basis tolonger-term rates with a prudent allowance for capital on a stochastic basis forthe possible scenarios where lower interest rates would prevail. Taiwan remains a key growth market for Prudential and was the largest of ourmarkets in Asia in the nine months to 30 September 2005 in terms of APE sales. Commentary on Nine Months' Results UK and Europe Insurance Operations Prudential UK and Europe APE sales in the first nine months of 2005 of £700million were up 34 per cent on the same period of 2004, driven mainly by strongsales of bulk annuities and unit-linked bonds. This increase in sales includesthe acquisition of the in-force pension annuities book from Phoenix Life &Pensions ("PLP") in June 2005. Excluding this transaction, APE sales increasedby 7 per cent. Bulk annuity sales in the first nine months of 2005 of £193 million were up £168million on the prior year. Excluding the PLP transaction, growth in bulk annuitysales remained strong (up 92 per cent), reflecting Prudential's leading positionin this market. Although sales of individual annuities through intermediaries slowed due to thecurrent competitive pricing environment to which Prudential chose not torespond, sales through the Partnerships and Direct to Consumer channels havelargely been unaffected. Total individual annuity sales increased by 4 per centon last year to £163 million, demonstrating the benefits of Prudential'sdiversified distribution capability. APE sales of unit-linked bonds increased 69 per cent to £49 million, reflectingcontinued progress being made by Prudential in the IFA unit-linked bond market. Corporate pension sales have remained challenging with APE sales of £117 millionin the first nine months of 2005 down 13 per cent on the same period last year.However, a number of larger mandates have been secured for the latter part of2005, including the group stakeholder pension schemes for Royal & SunAllianceand Goodyear Dunlop. APE sales for Prudential's European operations increased 88 per cent to £15million, reflecting growing bond sales through new and existing distributors. Both PruFund and PruHealth celebrated their first anniversaries in the thirdquarter. PruFund's initial investors received a total increase in their policyvalues of 8.4 per cent during the year (after tax and fund charges) reflectingthe continued superior investment performance of Prudential's life fund. Thisstrong investment performance was recognised in the Cazalet 2005 with-profitsreport where Prudential's rating increased from 8/10 to 9/10. PruHealth had a good first year with sales growing more than 30 per cent permonth in 2005. At the end of the third quarter of 2005, PruHealth had over 200group clients and covered approximately 13,250 individuals. Premium income forthe first nine months of 2005 was £5 million, of which £2 million was written inthe third quarter. Prudential's new lifetime mortgage product, Prudential Property Value ReleasePlan, has been open for quotations and illustrations since the end of August2005, and launched for new business earlier this month. This innovative productwhich gives customers greater flexibility and control over the timing of whenthey draw down funds, thereby reducing total interest charges over the lifetimeof the loan, has been well received by advisers and customers. In September 2005, Bankhall announced that Prudential had been appointed to itsmulti-tie panel to provide annuities, bonds, pensions, and protection products.Bankhall is one of the UK's largest distributors of financial advice with over7,500 financial advisers. This followed Prudential's appointment in July toSesame's regulated multi-tie panel. Prudential was selected as a provider ofguaranteed and with-profit annuities, investments, protection, and individualpensions and the panel went live in September. Prudential has been appointed toall but one of the major multi-tie networks announced to date and is stronglypositioned to increase its share in the depolarised marketplace as this developsover the next couple of years. Competition in some parts of the UK market remained challenging in the thirdquarter, in particular for protection and annuities where pricing hasintensified. Despite this, Prudential UK remains confident that it will achieveoverall growth in APE sales of 10 per cent in 2005. M&G M&G delivered record gross fund inflows of £5.6 billion in the first nine monthsof 2005, an increase of 62 per cent on the same period last year. Net fundinflows increased 343 per cent to £2.7 billion year to date. Gross retail fund inflows were a record £2.7 billion, more than double theinflows in the same period last year, on the back of strong retail fundperformance across all asset classes. Sales of equity funds were particularlystrong, reflecting the fact that in equities M&G now has 72 per cent of funds inthe top quartile over three years and 84 per cent of funds beating the sectoraverage. M&G's UK retail business delivered gross fund inflows of £1.1 billion,already surpassing the whole of 2004. M&G International, which sells funds inGermany, Austria, Italy, Luxembourg and Switzerland, continued to grow verystrongly, with gross fund inflows of £697 million, compared to £229 million forthe first nine months of 2004. The South African business generated gross fundinflows of £855 million, up from £225 million for the same period last year. Netretail fund inflows across M&G's retail businesses totalled £899 million, a 484per cent increase compared to last year. Gross institutional fund inflows increased by 31 per cent in the first ninemonths of this year, totalling £2.9 billion. Net fund inflows were £1.8 billion,compared to £463 million last year. M&G's Collateralised Debt Obligations (CDO)business continued to develop strongly with net inflows of £521 million in theyear to date. Institutional funds under management in the areas of segregatedfixed income, pooled funds and property have also continued to grow during theyear. Jackson National Life Jackson National Life (JNL) has delivered a strong result in the first ninemonths with total APE sales of £401 million up 17 per cent on the same period in2004, as a result of increased variable annuity, fixed index annuity, andinstitutional product sales. Total retail APE sales for the first nine months of£308 million were up 14 per cent on 2004 as improved variable and fixed indexannuity sales were partially offset by decreased fixed annuity sales during theperiod. For the first nine months of 2005, variable annuity APE sales of £187 millionwere up 27 per cent on the prior year, following on from record sales in 2004.Total sales of variable annuities exceeded $1 billion in each of the first threequarters of 2005, with sales in each consecutive quarter surpassing the last.This result was achieved against a decline in the variable annuity market of 5per cent for the first half of 2005(1), and reflects JNL's continued successin product innovation and distribution. JNL was ranked as the 12th largest provider of variable annuities in the USmarket during the first half of 2005, compared with 15th during the same periodlast year. Its variable annuity assets grew 11 per cent during the first half ofthe year, compared with total industry growth of 1 per cent1. The rate oftake-up of the fixed account option continued to decline at 22 per cent duringthe first nine months, compared with 28 per cent during the same period in 2004,primarily as a result of continued low interest rates and customers' desire forgreater equity exposure. APE sales of fixed annuities were £64 million, down 24 per cent on the firstnine months of 2004, reflecting continued low interest rates and a relativelyflat yield curve in the US, which has made rates on short-term certificates ofdeposit more attractive to customers. Fixed index annuity APE sales of £46 million were up 59 per cent on the firstnine months of 2004, reflecting customers' increasing preference for fixedproducts with the potential for higher returns linked to equity indexperformance. APE sales of life products of £11 million for the first nine months of 2005,were up 10 per cent on the prior year. APE sales of institutional products for the first nine months of the year were£94 million, up 31 per cent on the same period in 2004, reflecting severalattractive issuance opportunities in the first half of 2005. Curian Capital, which provides innovative fee-based separately managed accounts,had deposits of £315 million for the first nine months of the year, up 7 percent over the same period in 2004. Currently in its third year of operation,Curian has surpassed $1.5 billion of funds under management. Jackson National has delivered impressive sales growth in the first nine monthsof 2005. The customer friendly annuity products, low-cost structure,relationship-based distribution model, and award-winning customer service havepositioned the company well to capitalise on growth opportunities in the USmarket going forward. Prudential Corporation Asia Prudential's Asian operations have continued the strong growth shown at the halfyear with total APE sales in the first nine months of £508 million, up 27 percent on the same period last year. For the third quarter of 2005, sales on anAPE basis of £197 million represent an increase of 32 per cent on the same threemonth period in 2004 and 15 per cent growth over the second quarter of 2005.Sales of more profitable regular premium products continue to grow and nowrepresent 89 per cent of APE sales. Prudential's Korean life operation has sustained its strong performance recordedat the half year with third quarter APE sales of £31 million, an increase of 107per cent on the same quarter last year. APE sales for the first nine months of2005 were up 90 per cent on prior year. This increase clearly demonstrates theflexibility of its multi-channel distribution model, with in-house financialconsultants and general agents currently the primary distribution channels,supported by contributions from direct marketing and bancassurance. Prudential's Indian life insurance joint venture with ICICI remains firmly inposition as the number one private sector life insurance company. Prudential's26 per cent share of the joint venture's APE sales for the first nine months of2005 was £41 million, up 64 per cent on the same period in 2004. The businesscontinues to extend its geographic reach in India with 74 branches to date andhas grown its tied agency force by 72 per cent over prior year. The life insurance joint venture with CITIC in China continues its rapid growthwith a 17 per cent increase in third quarter APE sales compared to the secondquarter, and a 46 per cent increase compared to the third quarter last year. APEsales for the first nine months of 2005 were £16 million, up 33 per cent on thesame period of 2004. Progress continues to be made in establishing CITICPrudential as the leading foreign joint venture life insurer in terms ofgeographic coverage, with six new city licences added during 2005 bringing thetotal to 10. In Indonesia, APE sales for the first nine months of £33 million represent a 57per cent increase on the same period of 2004. Third quarter sales of £13 millionwere 18 per cent ahead of the second quarter. Third quarter APE sales in Taiwan increased 50 per cent over the second quarter.This was in part due to the successful launch of a new unit linked retirementproduct in the previous quarter. For the first nine months of 2005, APE saleswere up 13 per cent on prior year to £120 million. Unit-linked sales in Taiwancontinue to grow and now represent 65 per cent of total APE sales in Taiwan on ayear-to-date basis. Prudential's Singapore life operation delivered APE sales growth of 21 per centcompared to both the second quarter and to the same nine month period last year,driven in part by the launch of six new investment linked funds in 2005. In Hong Kong, growth in APE sales was 7 per cent compared with the same ninemonth period last year demonstrating good performance in a challenging market.Third quarter sales of the more profitable regular premium products havecontinued to grow quarter on quarter over the nine month period due to growthfrom the bancassurance channels. In Malaysia, Prudential's life business continues to benefit from its marketleading agent productivity with total APE sales for the first nine months of2005 of £46 million, up 18 per cent on the same nine month period last year. Year to date aggregate APE sales from the remaining four markets of thePhilippines, Thailand, Vietnam and Japan are down 9 per cent compared with thesame nine month period last year. In Vietnam, sales for the first nine months of2005 were down 20 per cent from the same period last year as industry growthcontinues to be slower than in 2004. Total investment product funds under management are £9.3 billion, up 22 per centon 2004. Earlier this year ICICI, Prudential's joint venture partner in thePrudential ICICI Asset Management Company, agreed to purchase an additional 6per cent share of Prudential ICICI Asset Management Company. The transaction wascompleted on 26th August, bringing ICICI Group's share to 51 per cent, whilePrudential now holds 49 per cent. As a result, Prudential no longer consolidatesPrudential ICICI Asset Management Company as a subsidiary. Net investment product inflows of £0.9 billion are up 249 per cent on 2004.Strong net inflows in Japan of £836 million and Korea of £473 million werepartially offset by net outflows in Taiwan of £570 million where the bond fundmarket remains unsettled and of £150 million in third party institutionalmandates. 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 maintain good sales growth for the remainder of2005. Egg Egg has separately announced its third quarter results today. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers(the "City Code"), any person who, alone or acting together with any otherperson(s) pursuant to an agreement or understanding (whether formal orinformal) to acquire or control relevant securities of Prudential or Egg,owns or controls, or becomes the owner or controller, directly orindirectly, of one per cent. or more of any class of securities ofPrudential or Egg is required to disclose, by not later than 12.00 noon(London time) on the London business day following the date of the relevanttransaction, dealings in such securities of that company (or in any optionin respect of, or derivative referenced to, any such securities) during theperiod to the date on which the offer becomes or is declared unconditionalas to acceptances or lapses or is otherwise withdrawn. Under the provisions of Rule 8.1 of the City Code, all dealings in relevantsecurities of Prudential or Egg by Prudential or Egg, or by any of theirrespective "associates" (within the meaning of the City Code) must also bedisclosed. If you are in any doubt as to the application of Rule 8 to you, pleasecontact an independent financial adviser authorised under the FinancialServices and Markets Act 2000, consult the Panel's website atwww.takeoverpanel.org.uk or contact the Panel on telephone number +44 207638 0129; fax +44 20 7236 7013. - ENDS - Enquiries: Media Investors / analystsJon Bunn 020 7548 3559 James Matthews 020 7548 3561William Baldwin-Charles 020 7548 3719 Marina Novis 020 7548 3511Joanne Doyle 020 7548 3708 Notes to Editors 1. All comparisons above and in the narrative below are quoted at constant exchange rates (CER). See Notes to Editors for further details. 2. 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 basis. The two bases are compared in the table below. Annual Premium Equivalent Sales Actual exchange rates Constant exchange rates YTD 2005 YTD 2004 +/-(%) YTD 2005 YTD 2004 +/-(%) £m £m £m £mUK & 700 521 34% 700 521 34%EuropeUS 401 346 16% 401 342 17%Asia 508 394 29% 508 401 27% ------ ------ ---- ------ ------ ----Total 1,609 1,261 28% 1,609 1,264 27% ------ ------ ---- ------ ------ ---- Gross Inflows Actual exchange rates Constant exchange rates YTD 2005 YTD 2004 +/-(%) YTD 2005 YTD 2004 +/-(%) £m £m £m £mM&G 5,600 3,451 62% 5,600 3,451 62%Asia 14,380 13,888 4% 14,380 14,472 (1%) ------ ------ ---- ------ ------ ----Total 19,980 17,339 15% 19,980 17,923 11% ------ ------ ---- ------ ------ ---- Total Insurance and Investment New Business Actual exchange rates Constant exchange rates YTD 2005 YTD 2004 +/-(%) YTD 2005 YTD 2004 +/-(%) £m £m £m £mInsurance 10,800 8,150 33% 10,800 8,124 33%Investment 19,980 17,339 15% 19,980 17,923 11% ------ ------ ---- ------ ------ ----Total 30,780 25,489 21% 30,780 26,047 18% ------ ------ ---- ------ ------ ---- 3. There will be a conference call today for wire services at 7.30am (BST) hosted by Mark Tucker, Group Chief Executive and Philip Broadley, Group Finance Director. Dial in telephone number: +44 (0)20 8609 0205. Passcode: 155439# 4. A press conference will take place at 11.30am (BST) at Governor's House, Laurence Pountney Hill, London, EC4R 0HH. This will be hosted by Mark Tucker, Group Chief Executive, and Philip Broadley, Group Finance Director. Please call the press office on +44 (0)20 7548 3708 if you wish to attend. 5. A presentation to analysts will take place at 9.30am (BST) at Governor's House, Laurence Pountney Hill, London, EC4R 0HH. An audio cast of the presentation and the presentation slides will be available on the Group's website, www.prudential.co.uk. 6. There will be a conference call for investors and analysts at 2.30pm (BST) hosted by Mark Tucker, Group Chief Executive and Philip Broadley, Group Finance Director. Please call from the UK +44 (0)800 358 2705 and from the US +1 866 793 4279. Pin number 487687#. A recording of this call will be available for replay for one week by dialling: +44 (0)20 8609 0289 from the UK or +1 866 676 5865 from the US. The conference reference number is 129574. 7. High resolution photographs are available to the media free of charge at www.newscast.co.uk (+44 (0) 207 608 1000). 8. An interview with Mark Tucker, Group Chief Executive, (in video/ audio/text) will be available on www.cantos.comand www.prudential.co.ukfrom 7.05am on 26th October 2005. 9. Annual premium equivalent (APE) sales comprise regular premium sales plus one-tenth of single premium insurance sales. 10. Total number of Prudential plc shares in issue as at 14th October 2005 was 2,383,761,711 11. Financial Calendar 2005-2006: Q4 New Business Figures 25th January 2006Full Year 2005 Results 16th March 2006Q1 New Business Figures 20th April 2006AGM 18th May 2006Interim Results 28th July 2006 12. In addition to the financial statements provided with this press release, additional financial schedules are available on the Group's website at www.prudential.co.uk *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 StatementsThis 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 RatesPRUDENTIAL PLC - NEW BUSINESS - NINE MONTHS 2005 TOTAL INSURANCE AND INVESTMENT NEW BUSINESS UK & Europe US (1a) Asia (1a) Total 2005 Q3 2004 Q3 +/- 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- (%) YTD YTD (%) YTD YTD YTD YTD YTD YTD £m £m £m £m £m £m £m £m Total 5,848 3,956 48% 3,919 3,340 17% 1,033 828 25% 10,800 8,124 33%InsuranceProductsTotal 5,600 3,451 62% - - 0% 14,380 14,472 (1%) 19,980 17,923 11%InvestmentProducts -GrossInflows(2) ------- ------- ------ ------- ------- ------- ------- ------- ------- ------- ------- -------Group 11,448 7,407 55% 3,919 3,340 17% 15,413 15,300 1% 30,780 26,047 18%Total ------- ------- ------ ------- ------- ------ ------- ------- ------ ------- ------- ------ INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- (%) YTD YTD YTD YTD YTD YTD YTD YTD £m £m £m £m £m £m £m £mUK InsuranceOperations :Direct toCustomer:Individual 10 7 43% 6 6 0% 16 13 23% 7 7 0%PensionsLife - With 10 9 11% 1 1 0% 11 10 10% 2 2 0%Profit BondLife - Other - - - 1 1 0% 1 1 0% 1 1 0%Individual 543 464 17% - - - 543 464 17% 54 46 17%Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Sub-Total 563 480 17% 8 8 0% 571 488 17% 64 56 14%DWP Rebates 234 252 (7%) - - - 234 252 (7%) 23 25 (8%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total 797 732 9% 8 8 0% 805 740 9% 88 81 9% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Business toBusiness:Corporate 160 108 48% 92 103 (11%) 252 211 19% 108 114 (5%)PensionsIndividual 151 162 (7%) - - - 151 162 (7%) 15 16 (6%)AnnuitiesBulk 413 253 63% - - - 413 253 63% 41 25 64%Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total 724 523 38% 92 103 (11%) 816 626 30% 164 155 6% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------IntermediatedDistribution:Individual 50 45 11% 14 16 (13%) 64 61 5% 19 21 (10%)PensionsCorporate 32 127 (75%) 6 7 (14%) 38 134 (72%) 9 20 (55%)PensionsLife - With 119 188 (37%) - - - 119 188 (37%) 12 19 (37%)Profit BondLife - Other 682 520 31% - - - 682 520 31% 68 52 31%BondLife - Other 4 - - 5 3 67% 9 3 200% 5 3 67%Individual 786 854 (8%) - - - 786 854 (8%) 79 85 (7%)Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Sub-Total 1,673 1,734 (4%) 25 26 (4%) 1,698 1,760 (4%) 192 199 (4%)DWP Rebates 80 92 (13%) - - - 80 92 (13%) 8 9 (11%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total 1,753 1,826 (4%) 25 26 (4%) 1,778 1,852 (4%) 200 209 (4%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Partnerships:Life - With - 3 - - - - - 3 - - 0 -Profit BondLife - Other 628 573 10% 3 1 200% 631 574 10% 66 58 14%Individual 145 88 65% - - - 145 88 65% 15 9 67%AnnuitiesBulk 1,519 - - - - - 1,519 - - 152 - -Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total 2,292 664 245% 3 1 200% 2,295 665 245% 232 67 246% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total :Individual 60 52 15% 20 22 (9%) 80 74 8% 26 27 (4%)PensionsCorporate 192 235 (18%) 98 110 (11%) 290 345 (16%) 117 134 (13%)PensionsLife - With 129 200 (36%) 1 1 0% 130 201 (35%) 14 21 (33%)Profit BondLife - Other 682 520 31% - - - 682 520 31% 68 52 31%BondLife - Other 632 573 10% 9 5 80% 641 578 11% 72 62 16%Individual 1,625 1,568 4% - - - 1,625 1,568 4% 163 157 4%AnnuitiesBulk 1,932 253 664% - - 1,932 253 664% 193 25 672%Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Sub-Total 5,252 3,401 54% 128 138 (7%) 5,380 3,539 52% 653 478 37%DWP Rebates 314 344 (9%) - - - 314 344 (9%) 31 34 (9%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total UK 5,566 3,745 49% 128 138 (7%) 5,694 3,883 47% 685 513 34%InsuranceOperations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------EuropeanInsuranceOperations :(1a)Insurance 154 72 114% - 1 - 154 73 111% 15 8 88%Products ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total 154 72 114% - 1 - 154 73 111% 15 8 88%EuropeanInsuranceOperations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total UK & 5,720 3,817 50% 128 139 (8%) 5,848 3,956 48% 700 521 34%EuropeanInsuranceOperations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------US InsuranceOperations :(1a)Fixed 639 838 (24%) - - - 639 838 (24%) 64 84 (24%)AnnuitiesFixed Index 460 290 59% - - - 460 290 59% 46 29 59%AnnuitiesVariable 1,870 1,471 27% - - - 1,870 1,471 27% 187 147 27%AnnuitiesLife (9) 8 10 (20%) 10 9 11% 18 19 (5%) 11 10 10% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Sub-total 2,977 2,609 14% 10 9 11% 2,987 2,618 14% 308 270 14%RetailGuaranteed 306 105 191% - - - 306 105 191% 31 11 182%InvestmentContractsGIC - Medium 626 617 1% - - - 626 617 1% 63 62 2%Term Note ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total US 3,909 3,331 17% 10 9 11% 3,919 3,340 17% 401 342 17%InsuranceOperations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------AsianInsuranceOperations :(1a)China 10 6 67% 15 11 36% 25 17 47% 16 12 33%Hong Kong 201 160 26% 55 54 2% 256 214 20% 75 70 7%India (@26%)(6) 2 4 (50%) 41 25 64% 43 29 48% 41 25 64%Indonesia 36 24 50% 29 18 61% 65 42 55% 33 20 65%Japan 19 12 58% 3 5 (40%) 22 17 29% 5 6 (17%)Korea 12 34 (65%) 90 45 100% 102 79 29% 91 48 90%Malaysia 8 5 60% 45 39 15% 53 44 20% 46 39 18%Singapore 194 155 25% 38 31 23% 232 186 25% 57 47 21%Taiwan 95 67 42% 110 99 11% 205 166 23% 120 106 13%Other (4) 6 7 14% 24 28 (14%) 30 35 (12%) 25 28 (11%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total Asian 583 474 23% 450 354 27% 1,033 828 25% 508 401 27%InsuranceOperations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Group Total 10,212 7,622 34% 588 502 17% 10,800 8,124 33% 1,609 1,264 27% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Schedule 1B - Actual Exchange RatesPRUDENTIAL PLC - NEW BUSINESS - NINE MONTHS 2005 TOTAL INSURANCE AND INVESTMENT NEW BUSINESS UK & Europe US (1b) Asia (1b) Total 2005 Q3 2004 Q3 +/- 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- 2005 Q3 2004 Q3 +/- YTD YTD (%) YTD YTD YTD YTD (%) YTD YTD (%) £m £m £m £m £m £m £m £m Total 5,848 3,955 48% 3,919 3,379 16% 1,033 816 27% 10,800 8,150 33%InsuranceProductsTotal 5,600 3,451 62% - - 0% 14,380 13,888 4% 19,980 17,339 15%InvestmentProducts -GrossInflows(2) ------- ------- ------ ------- ------- ------- ------- ------- ------ ------- ------- ------Group 11,448 7,406 55% 3,919 3,379 16% 15,413 14,704 5% 30,780 25,489 21%Total ------- ------- ------ ------- ------- ------ ------- ------- ------ ------- ------- ------ INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- (%) YTD YTD YTD YTD YTD YTD YTD YTD £m £m £m £m £m £m £m £m UK InsuranceOperations :Direct toCustomer:Individual 10 7 43% 6 6 0% 16 13 23% 7 7 0%PensionsLife - With 10 9 11% 1 1 0% 11 10 10% 2 2 0%Profit BondLife - Other - - - 1 1 0% 1 1 0% 1 1 0%Individual 543 464 17% - - - 543 464 17% 54 46 17%Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Sub-Total 563 480 17% 8 8 0% 571 488 17% 64 56 14%DWP Rebates 234 252 (7%) - - - 234 252 (7%) 23 25 (8%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total 797 732 9% 8 8 0% 805 740 9% 88 81 9% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Business toBusiness:Corporate 160 108 48% 92 103 (11%) 252 211 19% 108 114 (5%)PensionsIndividual 151 162 (7%) - - - 151 162 (7%) 15 16 (6%)AnnuitiesBulk 413 253 63% - - - 413 253 63% 41 25 64%Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total 724 523 38% 92 103 (11%) 816 626 30% 164 155 6% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------IntermediatedDistribution:Individual 50 45 11% 14 16 (13%) 64 61 5% 19 21 (10%)PensionsCorporate 32 127 (75%) 6 7 (14%) 38 134 (72%) 9 20 (55%)PensionsLife - With 119 188 (37%) - - - 119 188 (37%) 12 19 (37%)Profit BondLife - Other 682 520 31% - - - 682 520 31% 68 52 31%BondLife - Other 4 - - 5 3 67% 9 3 200% 5 3 67%Individual 786 854 (8%) - - - 786 854 (8%) 79 85 (7%)Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Sub-Total 1,673 1,734 (4%) 25 26 (4%) 1,698 1,760 (4%) 192 199 (4%)DWP Rebates 80 92 (13%) - - - 80 92 (13%) 8 9 (11%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total 1,753 1,826 (4%) 25 26 (4%) 1,778 1,852 (4%) 200 209 (4%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Partnerships:Life - With - 3 - - - - - 3 - - 0 -Profit BondLife - Other 628 573 10% 3 1 200% 631 574 10% 66 58 14%Individual 145 88 65% - - - 145 88 65% 15 9 67%AnnuitiesBulk 1,519 - - - - - 1,519 - - 152 - -Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total 2,292 664 245% 3 1 200% 2,295 665 245% 232 67 246% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total :Individual 60 52 15% 20 22 (9%) 80 74 8% 26 27 (4%)PensionsCorporate 192 235 (18%) 98 110 (11%) 290 345 (16%) 117 134 (13%)PensionsLife - With 129 200 (36%) 1 1 0% 130 201 (35%) 14 21 (33%)Profit BondLife - Other 682 520 31% - - - 682 520 31% 68 52 31%BondLife - Other 632 573 10% 9 5 80% 641 578 11% 72 62 16%Individual 1,625 1,568 4% - - - 1,625 1,568 4% 163 157 4%AnnuitiesBulk 1,932 253 664% - - 1,932 253 664% 193 25 672%Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Sub-Total 5,252 3,401 54% 128 138 (7%) 5,380 3,539 52% 653 478 37%DWP Rebates 314 344 (9%) - - - 314 344 (9%) 31 34 (9%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total UK 5,566 3,745 49% 128 138 (7%) 5,694 3,883 47% 685 513 34%InsuranceOperations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------EuropeanInsuranceOperations :(1b)Insurance 154 71 117% - 1 - 154 72 114% 15 8 88%Products ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total 154 71 117% - 1 - 154 72 114% 15 8 88%EuropeanInsuranceOperations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total UK & 5,720 3,816 50% 128 139 (8%) 5,848 3,955 48% 700 521 34%EuropeanInsuranceOperations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------US InsuranceOperations :(1b)Fixed 639 848 (25%) - - - 639 848 (25%) 64 85 (25%)AnnuitiesFixed Index 460 293 57% - - - 460 293 57% 46 29 59%AnnuitiesVariable 1,870 1,489 26% - - - 1,870 1,489 26% 187 149 26%AnnuitiesLife (9) 8 10 (20%) 10 9 11% 18 19 (5%) 11 10 10% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Sub-total 2,977 2,640 13% 10 9 11% 2,987 2,649 13% 308 273 13%RetailGuaranteed 306 106 189% - - - 306 106 189% 31 11 182%InvestmentContractsGIC - Medium 626 624 0% - - - 626 624 0% 63 62 2%Term Note ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total US 3,909 3,370 16% 10 9 11% 3,919 3,379 16% 401 346 16%InsuranceOperations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------AsianInsuranceOperations :(1b)China 10 6 67% 15 11 36% 25 17 47% 16 12 33%Hong Kong 201 162 24% 55 55 0% 256 217 18% 75 71 6%India (@26%)(6) 2 4 (50%) 41 24 71% 43 28 54% 41 24 71%Indonesia 36 27 33% 29 20 45% 65 47 38% 33 23 43%Japan 19 12 58% 3 5 (40%) 22 17 29% 5 6 (17%)Korea 12 30 (60%) 90 40 125% 102 70 46% 91 43 112%Malaysia 8 5 60% 45 39 15% 53 44 20% 46 40 15%Singapore 194 153 27% 38 31 23% 232 184 26% 57 46 24%Taiwan 95 64 48% 110 95 16% 205 159 29% 120 101 19%Other (4) 6 6 0% 24 27 (11%) 30 33 (9%) 25 28 (11%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total Asian 583 469 24% 450 347 30% 1,033 816 27% 508 394 29%InsuranceOperations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Group Total 10,212 7,655 33% 588 495 19% 10,800 8,150 33% 1,609 1,261 28% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Schedule 2PRUDENTIAL PLC - NEW BUSINESS - NINE MONTHS 2005 INVESTMENT OPERATIONS Opening Gross Redemptions Net Other Market & Net Closing FUM inflows inflows movements currency movement FUM movements in FUM 2005 M&GRetail 11,613 2,714 ( 1,815) 899 - 1,214 2,113 13,726Institutional 17,092 2,886 ( 1,050) 1,836 ( 156) 1,262 2,942 20,034(5) ------- ------- ------- ------- ------- ------- ------- -------Total M&G 28,705 5,600 ( 2,865) 2,735 ( 156) 2,476 5,055 33,760 ------- ------- ------- ------- ------- ------- ------- ------- AsiaIndia (10) 2,144 8,497 (8,357) 140 (1,186) 314 (732) 1,412Taiwan 1,797 1,836 ( 2,406) ( 570) - 143 ( 427) 1,370Korea 1,427 2,239 ( 1,766) 473 ( 21) 275 727 2,154Japan 1,638 1,138 ( 302) 836 - 68 904 2,542Other Mutual 583 611 ( 431) 180 - 55 235 818FundOperations ------- ------- ------- ------- ------- ------- ------- -------Total Asian 7,589 14,321 (13,262) 1,059 (1,207) 855 707 8,296Mutual FundOperations ------- ------- ------- ------- ------- ------- ------- -------Hong Kong MPF 244 59 ( 22) 37 - 30 67 311Products(@36%) (6) Third Party 705 - ( 150) ( 150) - 114 ( 36) 669InstitutionalMandates ------- ------- ------- ------- ------- ------- ------- -------Total Asia 949 59 ( 172) ( 113) - 144 31 980Other ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total Asian 8,538 14,380 (13,434) 946 (1,207) 999 738 9,276InvestmentOperations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total 37,243 19,980 (16,299) 3,681 (1,363) 3,475 5,793 43,036InvestmentProducts ------- ------- ------- ------- ------- ------- ------- ------- Opening Gross Redemptions Net Other Market & Net Closing FUM inflows inflows movements currency movement FUM movements in FUM 2004 M&GRetail 10,144 1,242 ( 1,088) 154 - 431 585 10,729Institutional 14,048 2,209 ( 1,746) 463 22 614 1,099 15,147(5) ------- ------- ------- ------- ------- ------- ------- -------Total M&G 24,192 3,451 ( 2,834) 617 22 1,045 1,684 25,876 ------- ------- ------- ------- ------- ------- ------- -------Asia India 2,049 6,519 (6,683) (164) (19) ( 13) ( 196) 1,853Taiwan 2,666 4,609 ( 5,426) ( 817) - ( 43) ( 860) 1,806Korea 933 1,625 ( 1,179) 446 ( 33) 12 425 1,358Japan 411 648 ( 81) 567 - 1 568Other Mutual 341 318 ( 129) 189 - 15 204 545FundOperations ------- ------- ------- ------- ------- ------- ------- -------Total Asian 6,400 13,719 (13,498) 221 ( 52) ( 28) 141 6,541Mutual FundOperations ------- ------- ------- ------- ------- ------- ------- -------Hong Kong MPF 196 57 ( 21) 36 - ( 1) 35 231Products(@36%) (6) Third Party 552 112 ( 140) ( 28) - 33 5 557InstitutionalMandates ------- ------- ------- ------- ------- ------- ------- -------Total Asia 748 169 ( 161) 8 - 32 40 788Other ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total Asian 7,148 13,888 ( 13,659) 229 ( 52) 4 181 7,329InvestmentOperations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total 31,340 17,339 (16,493) 846 ( 30) 1,049 1,865 33,205InvestmentProducts ------- ------- ------- ------- ------- ------- ------- ------- Opening Gross Redemptions Net Other Market & Net Closing FUM inflows inflows movements currency movement FUM movements in FUM 2005 movementrelative to2004 M&GRetail 14% 119% (67%) 484% - 182% 261% 28%Institutional(5) 22% 31% 40% 297% (809%) 106% 168% 32% ------- ------- ------- ------- ------- ------- ------- -------Total M&G 19% 62% (1%) 343% (809%) 137% 200% 0% ------- ------- ------- ------- ------- ------- ------- -------Asia 2,503India 5% 30% (25%) 185% (6142%) 2,515% (273%) 0%Taiwan (33%) (60%) 56% 30% - 433% 50% 0%Korea 53% 38% (50%) 6% 36% 2192% 71% 1%Japan 299% 76% (273%) 47% - 6700% 59% 160%Other Mutual 71% 92% (234%) (5%) - 267% 15% 50%FundOperations ------- ------- ------- ------- ------- ------- ------- -------Total Asian 19% 4% 2% 379% (2221%) 3154% 401% 27%Mutual FundOperations ------- ------- ------- ------- ------- ------- ------- -------Hong Kong MPF 24% 4% (5%) 3% - 3100% 91% 35%Products(@36%) (6) Third Party 28% 0% (7%) (436%) - 245% (820%) 20%InstitutionalMandates ------- ------- ------- ------- ------- ------- ------- -------Total Asia 27% (65%) (7%) (1513%) - 350% (23%) 24%Other ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total Asian 19% 4% 2% 313% (2221%) 24875% 308% 27%InvestmentOperations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Total 19% 15% 1% 335% (4443%) 231% 211% 30%InvestmentProducts ------- ------- ------- ------- ------- ------- ------- ------- US (7) 2005 Q3 2004 Q3 +/-(%) YTD YTD £m Curian CapitalExternal Funds 854 441 94%underAdministration ------- ------- --------- Schedule 3PRUDENTIAL PLC - NEW BUSINESS - QUARTER 3 2005 VERSUS QUARTER 3 2004 INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) Q3 2005 Q3 2004 +/- (%) Q3 2005 Q3 2004 +/- (%) Q3 2005 Q3 2004 +/- (%) Q3 Q3 2004 +/- (%) 2005 £m £m £m £m £m £m £m £m UK InsuranceOperations :Direct toCustomer:Individual 2 1 100% 2 2 0% 4 3 33% 2 2 0%PensionsLife - With 4 3 33% - - - 4 3 33% 0 0 0%Profit BondLife - Other - - - - - - - - - - - -Individual 178 159 12% - - - 178 159 12% 18 16 13%Annuities ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ -------Sub-Total 184 163 13% 2 2 0% 186 165 13% 20 18 11%DWP Rebates - - - - - - - - - - - - ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ -------Total 184 163 13% 2 2 0% 186 165 13% 20 18 11% ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ -------Business toBusiness:Corporate 46 31 48% 25 28 (11%) 71 59 20% 30 31 (3%)PensionsIndividual 54 68 (21%) - - - 54 68 (21%) 5 7 (29%)AnnuitiesBulk 93 43 116% - - - 93 43 116% 9 4 125%Annuities ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ -------Total 193 142 36% 25 28 (11%) 218 170 28% 44 42 5% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------ ------ -------IntermediatedDistribution:Individual 11 12 (8%) 5 5 0% 16 17 (6%) 6 6 0%PensionsCorporate 9 10 (10%) 2 2 0% 11 12 (8%) 3 3 0%PensionsLife - With 44 55 (20%) - - - 44 55 (20%) 4 6 (33%)Profit BondLife - Other 209 206 1% - - - 209 206 1% 21 21 0%BondLife - Other 1 - - 2 1 100% 3 1 200% 2 1 100%Individual 228 309 (26%) - - - 228 309 (26%) 23 31 (26%)Annuities ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ -------Sub-Total 502 592 (15%) 9 8 13% 511 600 (15%) 59 67 (12%)DWP Rebates - - - - - - - - 0% - - - ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ -------Total 502 592 (15%) 9 8 13% 511 600 (15%) 59 67 (12%) ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ -------Partnerships:Life - With - 1 - - - - - 1 - - 0 -Profit BondLife - Other 203 234 (13%) 2 1 100% 205 235 (13%) 22 24 (8%)Individual 52 40 30% - - - 52 40 30% 5 4 25%AnnuitiesBulk 44 - - - - - 44 - - 4 - -Annuities ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ -------Total 299 275 9% 2 1 100% 301 276 9% 32 29 10% ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ -------Total :Individual 13 13 0% 7 7 0% 20 20 0% 8 8 0%PensionsCorporate 55 41 34% 27 30 (10%) 82 71 15% 33 34 (3%)PensionsLife - With 48 59 (19%) - - - 48 59 (19%) 5 6 (17%)Profit BondLife - Other 209 206 1% - - - 209 206 1% 21 21 0%BondLife - Other 204 234 (13%) 4 2 100% 208 236 (12%) 24 25 (4%)Individual 512 576 (11%) - - - 512 576 (11%) 51 58 (12%)AnnuitiesBulk 137 43 219% - - - 137 43 219% 14 4 250%Annuities ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ -------Sub-Total 1,178 1,172 1% 38 39 (3%) 1,216 1,211 0% 156 156 0%DWP Rebates - - - - - - - - - - - - ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ -------Total UK 1,178 1,172 1% 38 39 (3%) 1,216 1,211 0% 156 156 0%InsuranceOperations ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ -------EuropeanInsuranceOperations :)Insurance 34 35 (3%) - 1 - 34 36 (6%) 3 5 (40%)Products ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ -------Total 34 35 (3%) - 1 - 34 36 (6%) 3 5 (40%)EuropeanInsuranceOperations ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ -------Total UK & 1,212 1,207 0% 38 40 (5%) 1,250 1,247 0% 159 161 (1%)EuropeanInsuranceOperations ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ -------US Insurance 0%Operations :(8)Fixed 229 275 (17%) - - - 229 275 (17%) 23 28 (18%)AnnuitiesFixed Index 164 136 21% - - - 164 136 21% 16 14 14%AnnuitiesVariable 686 483 42% - - - 686 483 42% 69 48 44%AnnuitiesLife (9) 2 6 (67%) 4 4 0% 6 10 (40%) 4 5 (20%) ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------- -------Sub-total 1,081 900 20% 4 4 0% 1,085 904 20% 112 94 19%RetailGuaranteed 119 75 59% - - - 119 75 59% 12 7 71%InvestmentContractsGIC - Medium 10 55 (82%) - - - 10 55 (82%) 1 6 (83%)Term Note ------- ------- - ------- ------ ------- ------- ------ ------- ------ ------- -------Total US 1,210 1,030 17% 4 4 0% 1,214 1,034 17% 125 107 17%InsuranceOperations ------- ------- ------- ------- ------ ------- ------- ------ ------- ------ ------- -------AsianInsuranceOperations :China 5 1 400% 6 5 20% 11 6 83% 7 5 40%Hong Kong 54 53 2% 20 19 5% 74 72 3% 25 24 4%India (@26%)(6) 1 1 0% 14 7 100% 15 8 88% 14 7 100%Indonesia 8 6 33% 12 6 100% 20 12 67% 13 7 86%Japan 8 5 60% 1 2 (50%) 9 7 29% 2 3 (33%)Korea 2 3 (33%) 31 13 138% 33 16 106% 31 13 138%Malaysia 2 2 0% 17 18 (6%) 19 20 (5%) 17 18 (6%)Singapore 77 57 35% 15 11 36% 92 68 35% 23 17 35%Taiwan 23 34 (32%) 55 38 45% 78 72 8% 57 41 39%Other (4) 3 2 50% 8 10 (20%) 11 12 (8%) 8 10 (20%) ------- ------- ------- ------- ------ ------- ------- ------ ------- ------ ------- -------Total Asian 183 164 12% 179 129 39% 362 293 24% 197 145 36%InsuranceOperations ------- ------- ------- ------- ------ ------- ------- ------ ------- ------ ------- ------- ------- ------- ------- ------- ------ ------- ------- ------ ------- ------ ------- -------Group Total 2,605 2,401 8% 221 173 28% 2,826 2,574 10% 481 413 16% ------- ------- ------- ------- ------ ------- ------- ------ ------- ------ ------- ------- INVESTMENT OPERATIONS M&G (5) Asia Mutual Funds Asia Other Total Investment Products Q3 2005 Q3 2004 +/- (%) Q3 2005 Q3 2004 +/- (%) Q3 2005 Q3 2004 +/- (%) Q3 2005 Q3 2004 +/- (%) £m £m £m £m £m £m £m £m Opening FUM 31,171 24,442 28% 9,388 6,876 37% 900 765 18% 41,459 32,083 29% Gross 2,021 1,275 59% 4,938 4,176 18% 20 16 25% 6,980 5,467 28%inflowsLess ( 966) ( 568) (70%) ( 4,554) ( 4,608) (1%) ( 9) ( 5) (80%) ( 5,529)( 5,180) (7%)redemptions -------- --------- --------- --------- --------- --------- --------- --------- -------- -------- ------- ---------Net flows 1,055 707 49% 385 ( 431) 189% 11 12 (8%) 1,451 287 406%Other ( 35) 63 (156%) ( 1,161) ( 13) (8831%) - - - ( 1,196) 50 (2492%)movementsMarket and 1,569 663 137% ( 316) 110 (387%) 69 12 475% 1,322 785 68%currencymovements -------- --------- --------- --------- --------- --------- --------- --------- -------- -------- ------- ---------Net 2,589 1,434 81% (1,093) ( 335) (226%) 80 23 248% 1,577 1,122 41%movement inFUM -------- --------- --------- --------- --------- --------- --------- --------- -------- -------- ------- ---------Closing FUM 33,760 25,876 30% 8,296 6,541 27% 980 788 24% 43,036 33,205 30% -------- --------- --------- --------- --------- --------- --------- --------- -------- -------- ------- --------- Schedule 4PRUDENTIAL PLC - NEW BUSINESS - QUARTER 3 2005 VERSUS QUARTER 3 2004 INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) Q3 2005 Q2 2005 +/- (%) Q3 2005 Q2 2005 +/- (%) Q3 2005 Q2 2005 +/- (%) Q3 2005 Q2 2005 +/- (%) £m £m £m £m £m £m £m £m UK InsuranceOperations :Direct toCustomer:Individual 2 4 (50%) 2 2 0% 4 6 (33%) 2 2 0%PensionsLife - With 4 4 0% - - - 4 4 0% 0 0 0%Profit BondIndividual 178 198 (10%) - - - 178 198 (10%) 18 20 (10%)Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------Sub-Total 184 206 (11%) 2 2 0% 186 208 (11%) 20 23 (13%)DWP Rebates - - - - - - - - 0% - - - ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------Total 184 206 (11%) 2 2 0% 186 208 (11%) 20 23 (13%) ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------Business toBusiness:Corporate 46 58 (21%) 25 36 (31%) 71 94 (24%) 30 42 (29%)PensionsIndividual 54 48 13% - - - 54 48 13% 5 5 0%AnnuitiesBulk 93 106 (12%) - - - 93 106 (12%) 9 11 (18%)Annuities ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------Total 193 212 (9%) 25 36 (31%) 218 248 (12%) 44 57 (23%) ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------IntermediatedDistribution:Individual 11 18 (39%) 5 5 0% 16 23 (30%) 6 7 (14%)PensionsCorporate 9 13 (31%) 2 2 0% 11 15 (27%) 3 3 0%PensionsLife - With 44 42 5% - - - 44 42 5% 4 4 0%Profit BondLife - Other 209 247 (15%) - - - 209 247 (15%) 21 25 (16%)BondLife - Other 1 3 (67%) 2 1 100% 3 4 (25%) 2 1 100%Individual 228 288 (21%) - - - 228 288 (21%) 23 29 (21%)Annuities ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------Sub-Total 502 611 (18%) 9 8 13% 511 619 (17%) 59 69 (14%)DWP Rebates - - - - - - - - - - - - ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------Total 502 611 (18%) 9 8 13% 511 619 (17%) 59 69 (14%) ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------Partnerships:Life - With - - - - - - - - - - - -Profit BondLife - Other 203 228 (11%) 2 - - 205 228 (10%) 22 23 (4%)Individual 52 50 4% - - - 52 50 4% 5 5 0%AnnuitiesBulk 44 1,450 (97%) - - - 44 1,450 (97%) 4 145 (97%)Annuities ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------Total 299 1,728 (83%) 2 - - 301 1,728 (83%) 32 173 (82%) ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------Total :Individual 13 22 (41%) 7 7 0% 20 29 (31%) 8 9 (11%)PensionsCorporate 55 71 (23%) 27 38 (29%) 82 109 (25%) 33 45 (27%)PensionsLife - With 48 46 4% - - - 48 46 4% 5 5 0%Profit BondLife - Other 209 247 (15%) - - - 209 247 (15%) 21 25 (16%)BondLife - Other 204 231 (12%) 4 1 300% 208 232 (10%) 24 24 0%Individual 512 584 (12%) - - - 512 584 (12%) 51 58 (12%)AnnuitiesBulk 137 1,556 (91%) - - - 137 1,556 (91%) 14 156 (91%)Annuities ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------Sub-Total 1,178 2,757 (57%) 38 46 (17%) 1,216 2,803 (57%) 156 322 (52%)DWP Rebates - - - - - - - - - - - - ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------Total UK 1,178 2,757 (57%) 38 46 (17%) 1,216 2,803 (57%) 156 322 (52%)InsuranceOperations ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------EuropeanInsuranceOperations :(8)Insurance 34 81 (58%) - - - 34 81 (58%) 3 8 (63%)Products ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------Total 34 81 (58%) - - - 34 81 (58%) 3 8 (63%)EuropeanInsuranceOperations ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------Total UK & 1,212 2,838 (57%) 38 46 (17%) 1,250 2,884 (57%) 159 330 (52%)EuropeanInsuranceOperations ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------US InsuranceOperations :(8)Fixed 229 245 (7%) - - - 229 245 (7%) 23 25 (8%)AnnuitiesFixed Index 164 169 (3%) - - - 164 169 (3%) 16 17 (6%)AnnuitiesVariable 686 637 8% - - - 686 637 8% 69 64 8%AnnuitiesLife (9) 2 2 0% 4 3 33% 6 5 20% 4 3 33% ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------Sub-total 1,081 1,053 3% 4 3 33% 1,085 1,056 3% 112 108 4%RetailGuaranteed 119 137 (13%) - - - 119 137 (13%) 12 14 (14%)InvestmentContractsGIC - Medium 10 256 (96%) - - - 10 256 (96%) 1 26 (96%)Term Note ------- ------- - ------- ------- ------- ------ ------- ------- ------- ------- -------Total US 1,210 1,446 (16%) 4 3 33% 1,214 1,449 (16%) 125 148 (16%)InsuranceOperations ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------AsianInsuranceOperations :(8)China 5 4 25% 6 5 20% 11 9 22% 7 5 40%Hong Kong 54 95 (43%) 20 18 11% 74 113 (35%) 25 28 (11%)India (@26%)(6) 1 - - 14 9 56% 15 9 67% 14 9 56%Indonesia 8 12 (33%) 12 10 20% 20 22 (9%) 13 11 18%Japan 8 6 33% 1 1 0% 9 7 29% 2 2 0%Korea 2 6 (67%) 31 32 (3%) 33 38 (13%) 31 33 (6%)Malaysia 2 4 (50%) 17 16 6% 19 20 (5%) 17 16 6%Singapore 77 72 7% 15 12 25% 92 84 10% 23 19 21%Taiwan 23 48 (52%) 55 33 67% 78 81 (4%) 57 38 50%Other (4) 3 2 50% 8 8 0% 11 10 10% 8 8 0% ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------Total Asian 183 249 (27%) 179 144 24% 362 393 (8%) 197 169 17%InsuranceOperations ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- -------Group Total 2,605 4,533 (43%) 221 193 15% 2,826 4,726 (40%) 481 646 (26%) ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- INVESTMENT OPERATIONS M&G (5) Asia Mutual Funds Asia Other Total Investment Products Q3 2005 Q2 2005 +/- (%) Q3 2005 Q2 2005 +/- (%) Q3 2005 Q2 2005 +/- (%) Q3 2005 Q2 2005 +/- (%) £m £m £m £m £m £m £m £m Opening FUM 31,171 30,061 4% 9,388 7,835 20% 900 973 (8%) 41,549 38,868 7% Gross 2,021 1,487 36% 4,938 4,766 4% 20 20 0% 6,980 6,273 11%inflowsLess ( 966) ( 1,067) 9% ( 4,554) ( 4,289) (6%) ( 9) ( 157) 94% ( 5,529) ( 5,513) 0%redemptions -------- --------- ------- --------- --------- --------- ------- --------- ------- ---------- --------- ------Net flows 1,055 420 151% 385 477 (19%) 11 ( 137) 108% 1,451 760 91%Other ( 35) ( 190) 82% ( 1,161) ( 6) (19250%) - - - ( 1,196) ( 196)(510%)movementsMarket and 1,569 879 78% ( 316) 1,082 (129%) 69 64 8% 1,322 2,026 (35%)currencymovements -------- --------- ------- --------- --------- --------- ------- --------- ------- ---------- --------- ------Net 2,589 1,109 133% (1,093) 1,554 (170%) 80 ( 73) 210% 1,577 2,590 (39%)movement inFUM -------- --------- ------- --------- --------- --------- ------- --------- ------- ---------- --------- ------Closing FUM 33,760 31,170 8% 8,296 9,388 (12%) 980 900 9% 43,036 41,459 4% -------- --------- ------- --------- --------- --------- ------- --------- ------- ---------- --------- ------ Notes to Schedules :(1a) Insurance and investment new business for overseas operations has beencalculated using constant exchange rates. The applicable rate for JacksonNational Life is 1.84 A comparison between the results at actual exchange rates and at constantexchange rates is given in the press release. (1b) Insurance and investment new business for overseas operations has beencalculated using average exchange rates. The applicable rate for JacksonNational Life is 1.84 (2004: 1.82). (2) Represents cash received from sale of investment products. (3) Annual Equivalents, calculated as regular new business contributions plus10% single new business contributions, are subject to roundings. (4) In Asia, 'Other' insurance operations include Thailand, the Philippines andVietnam. (5) Balance includes segregated and pooled pension funds, private finance assetsand other institutional clients. Other movements reflect the net flows arising from the cash component of a tactical asset allocation fund managed by PPM South Africa. (6) New business in India is included at Prudential's 26% interest in the Indialife operation. Mandatory Provident Fund (MPF) product sales in Hong Kong are included at Prudential's 36% interest in the Hong Kong MPF operation. (7) Balance sheet figures have been calculated at the closing exchange rate. The2004 balance is shown on a constant exchange rate. (8) Sales are converted using the year to date average exchange rate applicableat the time. The sterling results for individual quarters represent the difference between the year to date reported sterling results at successive quarters and will include foreign exchange movements from earlier periods (9) US Life sales for 2004 restated to be consistent with the presentation ofFull Year 2004 results. (10) On 26 August, Prudential's joint venture partner in the Prudential ICICIAsset Management Company purchased an additional 6% share ownership. As a result, Prudential no longer consolidates the company as a subsidiary. 2004 results are reported at 100%. END--------------------------(1) VARDS This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Prudential