26th Jan 2005 07:01
Prudential PLC26 January 2005 Embargo: 07.00 hrs Wednesday 26 January 2005 PRUDENTIAL PLC 2004 NEW BUSINESS RESULTS Record Group Insurance APE sales • Record total Group Insurance APE sales of £1.85 billion, up 26 per cent on 2003 • UK & Europe APE sales up 40 per cent on 2003 • JNL total APE sales up 21 per cent on 2003 • Asia APE sales up 14 per cent on 2003 • M&G external funds under management of £28.7 billion up 19 per cent on 2003 • Prudential Corporation Asia investment operations' funds under management of £7.8 billion, up 19 per cent on 2003 Prudential's Group Chief Executive, Jonathan Bloomer, commented: "All ourbusinesses are showing strong momentum, and we have delivered significantyear-on-year sales growth in each of our markets. Prudential UK's performance reflects its brand, financial strength and broadproduct range. The transition from direct sales force to multi-product,multi-channel distribution is nearing completion and we are well placed tocontinue to grow profitably in the UK market. In the US, JNL's attractive product range, distribution proposition and serviceoffering have combined to deliver its highest ever level of variable annuitysales, up 14 per cent on 2003. New business growth in Asia reflects action we have taken in the region to focuson profitable and sustainable business. We have driven growth throughout theyear, demonstrated by Q4 2004 APE sales up 25 per cent on Q3 2004 and full yearAPE sales up 14 per cent on 2003. Our joint venture with CITIC continues todevelop in China, having been granted two new licences for Shanghai and Suzhouduring 2004. It delivered growth of 70 per cent in new business APE sales on2003. Our businesses in Asia are well positioned for further growth in 2005. M&G's gross sales were up 54 per cent on 2003, reflecting significant growth inboth retail and institutional business. 2004 marked a record year of retailbusiness with gross inflows of £2 billion, up 61 per cent on the previous year. A strong contribution across each of our businesses helped to achieve recordsales in 2004. With the presence we have established in our chosen markets wewill continue to deliver profitable growth in 2005." \* The narrative is on a Constant Exchange Rate (CER) throughout. For more detailssee Notes to Editors. UK and Europe Insurance Operations__________________________________ Prudential UK and Europe's APE sales were up 40 per cent on 2003 to £817million. This included £111 million APE in relation to a substantial annuitytransaction with Royal London which concluded in December1. Excluding thistransaction, Prudential UK and Europe reported year-on-year sales growth of 21per cent. APE sales in the fourth quarter of the year of £294 million were up 104 per centon the fourth quarter of 2003 and 83 per cent up on the third quarter of 2004. This increase in premium income has been achieved without any material change incommission rates and we expect the full year new business margin to be broadlyin line with that achieved in the first half of 2004. Partnerships The Partnerships channel has had an outstanding year with APE sales of £206million, an increase of 489 per cent on 2003 (including Royal London). Excludingthe Royal London transaction, APE sales were £95 million, up 171 per cent on2003. Fourth quarter sales of £27 million (excluding Royal London) were up 200per cent on the fourth quarter of 2003. This result reflects the continuedgrowth in credit life protection product sales through our partnershipagreements with Lloyds TSB and Alliance and Leicester, up 224 per cent on 2003APE sales to £81 million. It was also due to increased individual annuity salesthrough our agreements with Zurich and Pearl, the latter being launched inSeptember 2004. In the second half of 2005, the existing reassurance agreement with Zurich willbe replaced in terms of new business with a direct offer arrangement under whichadvisers of Openwork (formerly Zurich Advice Network) will sell Prudential'srange of annuity products to their customers on an exclusive basis following theOpenwork operational launch. In addition, we are announcing today a partnershipagreement with St. James's Place (SJP) which will allow SJP Partners to sell onan exclusive basis Prudential's annuity products to their customers. Thisagreement becomes effective in May 2005 and will run for five years. Intermediaries APE sales through our intermediary channel were £267 million, a 17 per centincrease on 2003. This growth was achieved through increased sales ofunit-linked bonds of £49 million (up 219 per cent), individual annuities of £118million (up 42 per cent) and off-shore bonds of £27 million (up 32 per cent).Sales of unit-linked bonds in 2004 endorsed our commitment to developing ourcapability in this market. This included the recently-launched range ofprotected funds which were the first of a series of developments aimed atconsolidating our position as a major unit-linked bond provider to IFAs. Despite seeing reductions in sales of with-profit bonds during 2003, Prudentialhas the largest with-profits fund and believes there is still customer demandfor products offering a smoothed investment return. To meet this demand welaunched PruFund, our new transparent smoothed investment product in September.Savers invested £10 million (APE £1 million) in PruFund by the year-end. We saw another very strong return on the Prudential With-Profits Fund in 2004,which delivered a pre-tax return of 13.4 per cent, compared with the FTSE AllShare (Total Return) of 12.8 per cent. Over the last five years, theWith-Profits Fund has delivered a pre-tax return of 20.8 per cent. Prudential'sbonus declaration will be announced on 22 February 2005. Business to Business APE sales were up 14 per cent on 2003 to £223 million, with fourth quarter salesof £67 million up 60 per cent on third quarter 2004 sales. Corporate pensionsales were £152 million, 6 per cent higher than in 2003. Our focus on thecorporate market, differentiated service proposition and ability to work inpartnership with Employee Benefit Consultancies provide us with a strong basefor increasing our share of this market. APE sales of bulk annuities were £47million, an increase of 62 per cent on 2003. Sales of bulks comprised 83separate schemes, 32 of which were achieved in the fourth quarter. The pipelineof schemes considering buyout is strong with a high level of enquiries about ournew Risk Management products launched in 2004, as well as our established bulkproduct. Distribution During the year, Prudential was appointed to the regulated multi-tie panels forSesame, Millfield and THINC Destini (Prudential was also appointed as THINCDestini's single-tie annuity provider). In addition, earlier this week,Prudential was appointed to work with Tenet on the detailed design of Tenet'sregulated multi-tie platform and was also appointed by Burns-Anderson to leadthe design and formulation of its multi-tie proposition as well as securing aplace on its regulated multi-tie panel. Prudential expects that a significantproportion of IFAs will add to their whole-of-market proposition with a panelapproach, whereby they distribute the product range of a small number of lifecompanies. Depolarisation is also expected to have a significant impact on the bankdistribution model in the UK, as banks are able to offer their customersproducts from a panel of different providers rather than from a single productprovider. Any review by banks of existing single-tie relationships represents anopportunity for Prudential. Summary Prudential UK and Europe's performance in 2004 demonstrates our strength andbreadth of distribution across a number of channels. We are well-placed tocontinue to benefit from the positive developments in the UK market. Jackson National Life (JNL)___________________________ APE sales for the year of £453 million were up 21 per cent on 2003. Total retailsales of £368 million were up 12 per cent on 2003. Variable annuity sales growthin the first nine months (the latest period for which data is available) of 2004was 14 per cent compared with 5 per cent market growth (Source: VARDS). Retail APE sales in the fourth quarter were £95 million, up 30 per cent on thesame period in 2003. Variable annuities JNL delivered record variable annuity sales during 2004, reflecting the benefitsof its innovative product range, distribution proposition and service offering.Total APE sales of £198 million were up 14 per cent on last year. For the firstnine months of the year, JNL had a top 10 market position in terms of variableannuity net flows and its unbundled annuity product "Perspective II" was thebest selling variable annuity product in the US, in terms of net flows (SourceVARDS). The rate of take up of the fixed account option continued at normallevels, with 29 per cent of the variable annuity premium going into the fixedaccounts compared with 48 per cent in 2003. Fixed annuities Fixed annuity APE sales of £113 million were down 8 per cent on 2003, due to thecontinued low interest rate environment. The resulting lower crediting rateshave limited demand for this product. However, recent interest rate moves havegenerated more interest in fixed and equity-linked indexed annuity products. Inthe fourth quarter, fixed annuity sales were up 5 per cent on the previousquarter. Equity-linked indexed annuities Equity-linked indexed annuity APE sales of £43 million were up 87 per cent on2003, reflecting customers' increasing preference for fixed products with thepotential for higher returns linked to equity index performance. Life JNL continues to focus on developing its life business to achieve a greaterbalance of fee, spread and underwriting income. A dedicated distribution teamwas created in 2003 to focus on building relationships with life agents andseveral new products have been introduced, such as variable universal life. LifeAPE sales of £14 million were 17 per cent up on 2003. An agreement to buy LifeInsurance Company of Georgia was announced in November. Curian Capital In March 2003, JNL entered the Registered Investment Advisor channel with thelaunch of Curian Capital which provides innovative fee based separately managedaccounts. It continues to build a strong position with total assets undermanagement at the end of 2004 of £550 million compared with £139 million at thestart of the year. Institutional Institutional APE sales of £85 million were up 98 per cent on 2003. JNL hastaken advantage of attractive issuance opportunities as they have arisen duringthe year, and will continue to do so in 2005. Summary JNL is well positioned to grow faster than the market as current marketconditions continue to favour companies which have a range of variable and fixedannuity product offerings, a relationship-based distribution model andaward-winning service. Prudential Corporation Asia___________________________ Insurance operations Prudential's Asian operations continue to show good new business growth andreflect our focus on building a profitable and sustainable platform. Overall APEsales of £181 million in the fourth quarter of 2004 are up 25 per cent over thethird quarter and reflect continued momentum across the region. APE sales of£576 million for the year are up 14 per cent on last year with underlying growthof 20 per cent excluding discontinued lines in Japan. During 2004 we had great success in India in our life joint venture with ICICI(up 127 per cent at £34 million for our 26% stake) where our brand and abilityto leverage product and distribution innovation has strengthened our position asthe leading private sector life insurance provider. In Korea (up 113 per cent at£64 million), the large increase in APE sales has been driven by our successfulmulti-channel distribution and the launch of a variable universal life product. New business APE for China at £17 million increased by 70 per cent over 2003 andthe prospects for significant growth over the long term remain compelling.During 2004 we received licences for two more cities, launching our Suzhouoperation in September and Shanghai's opening is planned for the first quarterof 2005. We expect our pace of expansion in China to increase during 2005 asmore cities and provinces are opened up to foreign insurers. Taiwan grew 23 per cent to £152 million with a continued focus on higher marginregular premium linked business in line with our strategic focus as discussed inthe interim results. In the more established markets of Hong Kong, Singapore andMalaysia we continue actively to manage our business for sustainable andprofitable growth. Average new business APE sales across these markets is 8 percent higher than 2003. The remaining 'other' operations continue to grow well and are building scale,but during 2004 we saw a softening of industry growth particularly in Vietnamafter the initial explosive growth following liberalisation of the market. Investment Business Total investment product funds under management are £7.8 billion up 19 per centon 2003. Net investment product inflows were £1.2 billion, down 22 per cent on2003. Strong net inflows in Japan (£1.3 billion), and Korea (£0.4 billion) werepartially offset by net outflows in Taiwan of £0.9 billion where industry-wideconcerns over the liquidity of some bond funds unsettled the market during thesecond half of 2004. The Indian mutual fund market has seen a marked slowdownthis year principally due to rising and volatile interest rates affecting thegrowth of fixed income funds. Despite a 90 per cent decrease in net inflows over2003, we have maintained our number one position for funds under management inIndia's private sector with a market share at around 14%. In Malaysia, we haveattained a top 5 position in the market, 3 years after launch. Summary Prudential Corporation Asia has a strong platform across the region with a welldiversified portfolio of businesses clearly focused on delivering sustainableand profitable growth over the long term. We remain very positive on the outlookfor 2005. M&G___ M&G enjoyed a significant increase in sales during 2004, with gross fund inflowsup 54 per cent to £5.8 billion, reflecting its diversified product offering inthe areas of retail fund management, institutional fixed income, pooled life andpension funds, property and private finance. Net fund inflows were up 48 percent to £2 billion. External funds under management, which representapproximately one quarter of M&G's total funds under management, rose by 19 percent during the year to £28.7 billion. Gross retail fund inflows were a record £2 billion in 2004, up 61 per cent onthe previous year, boosted by international sales and the success of the M&GProperty Fund. Net retail fund inflows during 2004 were £417 million. M&G's institutional business also had a successful year, especially in the areasof segregated fixed income and private finance, with gross fund inflowsincreasing 50 per cent to £3.9 billion. Net institutional fund inflows were £1.6billion. M&G believe that market conditions are now more positive for fund managementcompanies and its businesses are well placed to capitalise on this due to theirstrong competitive positions in their chosen markets. Egg___ Egg will announce its full year results on 23 February 2005. -ENDS- Enquiries to:_____________ Rebecca Burrows, Group Communications Director 020 7548 3537 Media Relations Investors/Analysts Clare Staley 020 7548 3719 Mike Kempster 020 7548 3823 Joanne Davidson 020 7548 3708 Marina Lee-Steere 020 7548 3511 Notes to Editors:_________________ 1. In December 2004, we reached an agreement with Royal London to reassure Scottish Life's approximately 60,000 in-force annuities, representing in excess of £1 billion of funds under management. Prudential is initially providing reassurance to Scottish Life (a division of Royal London) which will continue to make payments to annuitants, with Prudential reimbursing the annuity payments administered by Scottish Life. It is intended that the Scottish Life annuities will transfer to Prudential, subject to legal and regulatory approvals, by the end of 2005 when Prudential will take over responsibility for the administration and paying of all these annuitants. 2. There will be conference call today for wire services hosted by Jonathan Bloomer, Group Chief Executive, and Philip Broadley, Group Finance Director at 7.45am (UK time). Dial-in telephone number: +44 (0) 20 8288 4530. Callers to quote "Prudential" for access to the call. 3. There will be a conference call for investors and analysts at 2:30pm (UK time) hosted by Jonathan Bloomer, and Philip Broadley. Dial in telephone number: UK callers: + 44 (0) 20 7162 0184, US callers: + 1 334 420 4951. Callers to quote "Prudential" for access to the call. A recording of this call will be available for replay for one week by dialling: UK: +44 (0) 20 7031 4064, US: +1 954 334 0342, Passcode 640410. 4. 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 2004 FY £m 2003 FY £m +/- (%) 2004 FY £m 2003 FY £m +/- (%) UK and Europe 817 584 40% 817 584 40% US 453 418 8% 453 374 21% Asia 576 555 4% 576 506 14% Total 1,846 1,557 19% 1,846 1,464 26% Gross Inflows Actual exchange rates Constant exchange rates 2004 FY £m 2003 FY £m +/- (%) 2004 FY £m 2003 FY £m +/- (%) M&G 5,845 3,797 54% 5,845 3,797 54% Asia 18,845 18,157 4% 18,845 16,864 12% Total 24,690 21,954 12% 24,690 20,661 20% Total Insurance and Investment New Business Actual exchange rates Constant exchange rates 2004 FY £m 2003 FY £m +/- (%) 2004 FY £m 2003 FY £m +/- (%) Insurance 12,130 9,183 32% 12,130 8,658 40% Investment 24,690 21,954 12% 24,690 20,661 20% Total 36,820 31,137 18% 36,820 29,316 26% 5. Annual premium equivalent (APE) sales comprise regular premium insurance sales plus one-tenth of single premium insurance sales. 6. Certain investment mandates previously reported as UK corporate pensions are now reported as M&G institutional investment flows. The impact is to reduce UK corporate pensions APE sales by £31 million for the full-year 2003. 7. US institutional products (previously referred to as "stable value products") consist of guaranteed investment contracts (GICs), funding agreements and medium-term notes backed by funding agreements. *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 £170 billion inassets under management, as at 30 June 2004. Prudential plc is not affiliated inany manner with Prudential Financial, Inc, a company whose principal place ofbusiness 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 - FULL YEAR 2004 UK & Europe US (1) Asia (1) Total FY 2004 FY 2003 +/- (%) FY 2004 FY 2003 +/- (%) FY 2004 FY 2003 +/- (%) FY 2004 FY 2003 +/- (%) £m £m £m £m £m £m £m £m Total Insurance 6,538 4,129 58% 4,420 3,628 22% 1,172 901 30% 12,130 8,658 40%ProductsTotal Investment 5,845 3,797 54% - - - 18,845 16,864 12% 24,690 20,661 20%Products - Gross Inflows(2) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Group Total 12,383 7,926 56% 4,420 3,628 22% 20,017 17,765 13% 36,820 29,319 26% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) FY 2004 FY 2003 +/- (%) FY 2004 FY 2003 +/- (%) FY 2004 FY 2003 +/- (%) FY 2004 FY 2003 +/- (%) £m £m £m £m £m £m £m £mUK Insurance Operations: (4)Direct toCustomer:Individual 8 9 (11%) 8 9 (11%) 16 18 (11%) 9 10 (10%)PensionsLife - With 11 13 (15%) 1 1 0% 12 14 (14%) 2 2 0%Profit BondLife - Other - - - 1 2 (50%) 1 2 (50%) 1 2 (50%)Individual 630 657 (4%) - - - 630 657 (4%) 63 66 (5%)Annuities ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 649 679 (4%) 10 12 (17%) 659 691 (5%) 75 80 (6%)DWP Rebates 265 280 (5%) - - - 265 280 (5%) 27 28 (4%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 914 959 (5%) 10 12 (17%) 924 971 (5%) 101 108 (6%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Business toBusiness:Corporate 153 168 (9%) 137 127 8% 290 295 (2%) 152 144 6%PensionsIndividual 229 223 3% - - - 229 223 3% 23 22 5%AnnuitiesBulk Annuities 474 287 65% - - - 474 287 65% 47 29 62% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 856 678 26% 137 127 8% 993 805 23% 223 195 14% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----IntermediatedDistribution :Individual 55 53 4% 17 23 (26%) 72 76 (5%) 23 28 (18%)PensionsCorporate 134 67 100% 8 6 33% 142 73 95% 21 13 62%PensionsLife - With 231 450 (49%) - - - 231 450 (49%) 23 45 (49%)Profit BondLife - Other 770 366 110% - - - 770 366 110% 77 37 108%BondLife - Other - 2 - 5 22 (77%) 5 24 (79%) 5 22 (77%)Individual 1,180 828 43% - - - 1,180 828 43% 118 83 42%Annuities ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 2,370 1,766 34% 30 51 (41%) 2,400 1,817 32% 267 228 17%DWP Rebates 89 103 (14%) - - - 89 103 (14%) 9 10 (10%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 2,459 1,869 32% 30 51 (41%) 2,489 1,920 30% 276 238 16% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Partnerships :Life - With 3 46 (93%) - - - 3 46 (93%) 0 5 (100%)Profit BondLife - Other 787 247 219% 2 - - 789 247 219% 81 25 224%Individual 141 52 171% - - - 141 52 171% 14 5 180%AnnuitiesBulk Annuities 1,108 - - - - - 1,108 - - 111 - - ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 2,039 345 491% 2 - - 2,041 345 492% 206 35 489% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total :Individual 63 62 2% 25 32 (22%) 88 94 (6%) 31 38 (18%)PensionsCorporate 287 235 22% 145 133 9% 432 368 17% 174 157 11%PensionsLife - With 245 509 (52%) 1 1 0% 246 510 (52%) 26 52 (50%)Profit BondLife - Other 770 366 110% - - - 770 366 110% 77 37 108%BondLife - Other 787 249 216% 8 24 (67%) 795 273 191% 87 49 78%Individual 2,180 1,760 24% - - - 2,180 1,760 24% 218 176 24%AnnuitiesBulk Annuities 1,582 287 451% - - - 1,582 287 451% 158 29 445% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 5,914 3,468 71% 179 190 (6%) 6,093 3,658 67% 770 537 43%DWP Rebates 354 383 (8%) - - - 354 383 (8%) 35 38 (8%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total UK 6,268 3,851 63% 179 190 (6%) 6,447 4,041 60% 806 575 40%InsuranceOperations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----EuropeanInsuranceOperations :(1)Insurance 89 88 1% 2 - - 91 88 3% 11 9 22%Products ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total European 89 88 1% 2 - - 91 88 3% 11 9 22%InsuranceOperations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total UK & 6,357 3,939 61% 181 190 (5%) 6,538 4,129 58% 817 584 40%EuropeanInsuranceOperations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----US InsuranceOperations :(1)Fixed Annuities 1,130 1,227 (8%) - - - 1,130 1,227 (8%) 113 123 (8%)Equity-Linked 429 228 88% - - - 429 228 88% 43 23 87%Indexed AnnuitiesVariable 1,981 1,728 15% - - - 1,981 1,728 15% 198 173 14%AnnuitiesLife 16 - - 12 12 0% 28 12 133% 14 12 17% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 3,556 3,183 12% 12 12 0% 3,568 3,195 12% 368 330 12%RetailGuaranteed 180 163 10% - - - 180 163 10% 18 16 13%InvestmentContractsGIC - Medium 672 270 149% - - - 672 270 149% 67 27 148%Term Note ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total US 4,408 3,616 22% 12 12 0% 4,420 3,628 22% 453 374 21%InsuranceOperations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Asian Insurance Operations :(1)China 9 6 50% 16 10 60% 25 16 56% 17 10 70%Hong Kong 255 169 51% 78 74 5% 333 243 37% 104 91 14%India (@26%) 5 4 25% 33 15 120% 38 19 100% 34 15 127%Indonesia 38 23 65% 28 27 4% 66 49 35% 32 29 10%Japan 17 9 89% 7 34 (79%) 24 43 (44%) 9 34 (74%)Korea 36 18 100% 60 28 114% 96 46 109% 64 30 113%Malaysia 7 10 (30%) 61 53 15% 68 63 8% 62 54 15%Singapore 199 168 18% 47 53 (11%) 246 221 11% 67 70 (4%)Taiwan 88 26 238% 143 121 18% 231 147 57% 152 124 23%Other (5) 8 6 33% 37 48 (23%) 45 54 (17%) 38 48 (21%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total Asian 662 439 51% 510 462 10% 1,172 901 30% 576 506 14%InsuranceOperations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Group Total 11,427 7,994 43% 703 664 6% 12,130 8,658 40% 1,846 1,464 26% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Schedule 1B - Actual Exchange Rates PRUDENTIAL PLC - NEW BUSINESS - FULL YEAR 2004 TOTAL INSURANCE AND INVESTMENT NEW BUSINESS UK & Europe US (1b) Asia (1b) Total FY 2004 FY 2003 +/- (%) FY 2004 FY 2003 +/- (%) FY 2004 FY 2003 +/- (%) FY 2004 FY 2003 +/- (%) £m £m £m £m £m £m £m £m Total Insurance 6,538 4,128 58% 4,420 4,066 9% 1,172 989 19% 12,130 9,183 32%ProductsTotal Investment 5,845 3,797 54% - - - 18,845 18,157 4% 24,690 21,954 12%Products - GrossInflows (2) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Group Total 12,383 7,925 56% 4,420 4,066 9% 20,017 19,146 5% 36,820 31,137 18% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) FY 2004 FY 2003 +/- (%) FY 2004 FY 2003 +/- (%) FY 2004 FY 2003 +/- (%) FY 2004 FY 2003 +/- (%) £m £m £m £m £m £m £m £mUK Insurance Operations :(4)Direct toCustomer:Individual 8 9 (11%) 8 9 (11%) 16 18 (11%) 9 10 (10%)PensionsLife - With 11 13 (15%) 1 1 0% 12 14 (14%) 2 2 0%Profit BondLife - Other - - - 1 2 (50%) 1 2 (50%) 1 2 (50%)Individual 630 657 (4%) - - - 630 657 (4%) 63 66 (5%)Annuities ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 649 679 (4%) 10 12 (17%) 659 691 (5%) 75 80 (6%)DWP Rebates 265 280 (5%) - - - 265 280 (5%) 27 28 (4%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 914 959 (5%) 10 12 (17%) 924 971 (5%) 101 108 (6%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Business toBusiness:Corporate 153 168 (9%) 137 127 8% 290 295 (2%) 152 144 6%PensionsIndividual 229 223 3% - - - 229 223 3% 23 22 5%AnnuitiesBulk Annuities 474 287 65% - - - 474 287 65% 47 29 62% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 856 678 26% 137 127 8% 993 805 23% 223 195 14% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Intermediated Distribution :Individual 55 53 4% 17 23 (26%) 72 76 (5%) 23 28 (18%)PensionsCorporate 134 67 100% 8 6 33% 142 73 95% 21 13 62%PensionsLife - With 231 450 (49%) - - - 231 450 (49%) 23 45 (49%)Profit BondLife - Other Bond 770 366 110% - - - 770 366 110% 77 37 108%Life - Other - 2 - 5 22 (77%) 5 24 (79%) 5 22 (77%)Individual 1,180 828 43% - - - 1,180 828 43% 118 83 42%Annuities ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 2,370 1,766 34% 30 51 (41%) 2,400 1,817 32% 267 228 17%DWP Rebates 89 103 (14%) - - - 89 103 (14%) 9 10 (10%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 2,459 1,869 32% 30 51 (41%) 2,489 1,920 30% 276 238 16% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Partnerships :Life - With 3 46 (93%) - - - 3 46 (93%) 0 5 (100%)Profit BondLife - Other 787 247 219% 2 - - 789 247 219% 81 25 224%Individual 141 52 171% - - - 141 52 171% 14 5 180%AnnuitiesBulk Annuities 1,108 - - - - - 1,108 - - 111 - - ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 2,039 345 491% 2 - - 2,041 345 492% 206 35 489% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total :Individual 63 62 2% 25 32 (22%) 88 94 (6%) 31 38 (18%)PensionsCorporate 287 235 22% 145 133 9% 432 368 17% 174 157 11%PensionsLife - With 245 509 (52%) 1 1 0% 246 510 (52%) 26 52 (50%)Profit BondLife - Other Bond 770 366 110% - - - 770 366 110% 77 37 108%Life - Other 787 249 216% 8 24 (67%) 795 273 191% 87 49 78%Individual 2,180 1,760 24% - - - 2,180 1,760 24% 218 176 24%AnnuitiesBulk Annuities 1,582 287 451% - - - 1,582 287 451% 158 29 445% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 5,914 3,468 71% 179 190 (6%) 6,093 3,658 67% 770 537 43%DWP Rebates 354 383 (8%) - - - 354 383 (8%) 35 38 (8%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total UK 6,268 3,851 63% 179 190 (6%) 6,447 4,041 60% 806 575 40%InsuranceOperations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----European InsuranceOperations : (1b)Insurance 89 87 2% 2 - - 91 87 5% 11 9 22%Products ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total European 89 87 2% 2 - - 91 87 5% 11 9 22%InsuranceOperations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total UK & European 6,357 3,938 61% 181 190 (5%) 6,538 4,128 58% 817 584 40%Insurance Operations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----US Insurance Operations : (1b)Fixed Annuities 1,130 1,375 (18%) - - - 1,130 1,375 (18%) 113 138 (18%)Equity-Linked 429 255 68% - - - 429 255 68% 43 25 72%Indexed AnnuitiesVariable 1,981 1,937 2% - - - 1,981 1,937 2% 198 194 2%AnnuitiesLife 16 - - 12 13 (8%) 28 13 115% 14 13 8% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total Retail 3,556 3,567 (0%) 12 13 (8%) 3,568 3,580 (0%) 368 370 (1%)Guaranteed 180 183 (2%) - - - 180 183 (2%) 18 18 0%InvestmentContractsGIC - Medium Term 672 303 122% - - - 672 303 122% 67 30 123%Note ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total US Insurance 4,408 4,053 9% 12 13 (8%) 4,420 4,066 9% 453 418 8%Operations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Asian Insurance Operations : (1b)China 9 7 29% 16 11 45% 25 18 39% 17 12 42%Hong Kong 255 189 35% 78 83 (6%) 333 272 22% 104 102 2%India (@26%) 5 4 25% 33 16 106% 38 20 90% 34 16 113%Indonesia 38 27 41% 28 31 (10%) 66 58 14% 32 34 (6%)Japan 17 9 89% 7 35 (80%) 24 44 (45%) 9 36 (75%)Korea 36 19 89% 60 30 100% 96 49 96% 64 32 100%Malaysia 7 11 (36%) 61 59 3% 68 70 (3%) 62 60 3%Singapore 199 181 10% 47 57 (18%) 246 238 3% 67 75 (11%)Taiwan 88 28 214% 143 132 8% 231 160 44% 152 135 13%Other (5) 8 7 14% 37 53 (30%) 45 60 (25%) 38 54 (30%) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total Asian Insurance 662 482 37% 510 507 1% 1,172 989 19% 576 555 4%Operations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Group Total 11,427 8,473 35% 703 710 (1%) 12,130 9,183 32% 1,846 1,557 19% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Schedule 2 PRUDENTIAL PLC - NEW BUSINESS - FULL YEAR 2004 INVESTMENT OPERATIONS Opening FUM Gross Redemptions Net Other Market & Net Closing inflows inflows movements currency movement FUM movements in FUM £m £m £m £m £m £m £m £m2004M&GM&G branded retail 8,819 1,795 ( 1,351) 444 - 960 1,404 10,223investment productsPrudential branded 1,325 159 ( 186) ( 27) - 92 65 1,390UK retail investmentproducts (6)M&G institutional (7) 14,048 3,891 ( 2,304) 1,587 145 1,312 3,044 17,092 ----- ----- ----- ----- ----- ----- ----- -----Total M&G 24,192 5,845 ( 3,841) 2,004 145 2,364 4,513 28,705 ----- ----- ----- ----- ----- ----- ----- -----AsiaIndia 2,049 9,129 ( 9,068) 61 ( 21) 55 95 2,144Taiwan 2,666 5,696 ( 6,550) ( 854) - ( 15) ( 869) 1,797Korea 933 2,132 ( 1,696) 436 ( 42) 99 493 1,426Other Mutual Fund 752 1,814 ( 307) 1,507 - ( 38) 1,469 2,221Operations ----- ----- ----- ----- ----- ----- ----- -----Total Asian Mutual 6,400 18,771 ( 17,621) 1,150 ( 63) 101 1,188 7,588Fund Operations ----- ----- ----- ----- ----- ----- ----- -----Hong Kong MPF 196 74 ( 26) 48 - - 48 244Products (8) ----- ----- ----- ----- ----- ----- ----- -----Total Asian Investment 6,596 18,845 ( 17,647) 1,198 ( 63) 101 1,236 7,832Operations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total Investment 30,788 24,690 ( 21,488) 3,202 82 2,465 5,749 36,537Products ----- ----- ----- ----- ----- ----- ----- ----- Opening FUM Gross Redemptions Net Other Market & Net Closing inflows inflows movements currency movement FUM movements in FUM £m £m £m £m £m £m £m £m2003M&GM&G branded retail 7,587 1,068 ( 883) 185 ( 14) 1,061 1,232 8,819investment productsPrudential branded 1,137 143 ( 144) ( 1) - 189 188 1,325UK retail investmentproducts (6)M&G institutional 11,560 2,586 ( 1,417) 1,169 - 1,319 2,488 14,048(4) (7) ----- ----- ----- ----- ----- ----- ----- -----Total M&G 20,284 3,797 ( 2,444) 1,353 ( 14) 2,569 3,908 24,192 ----- ----- ----- ----- ----- ----- ----- -----AsiaIndia 1,372 7,534 ( 6,906) 628 ( 67) 116 677 2,049Taiwan 2,425 7,488 ( 7,114) 374 - ( 133) 241 2,666Korea 993 2,339 ( 2,329) 10 ( 25) ( 45) ( 60) 933Other Mutual Fund 306 724 ( 267) 457 - ( 11) 446 752Operations ----- ----- ----- ----- ----- ----- ----- -----Total Asian Mutual 5,096 18,085 ( 16,616) 1,469 ( 92) ( 73) 1,304 6,400Fund Operations ----- ----- ----- ----- ----- ----- ----- -----Hong Kong MPF 136 72 ( 19) 53 - 7 60 196Products (8) ----- ----- ----- ----- ----- ----- ----- -----Total Asian Investment 5,232 18,157 ( 16,635) 1,522 ( 92) ( 66) 1,364 6,596Operations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total Investment 25,516 21,954 (19,079) 2,875 ( 106) 2,503 5,272 30,788Products ----- ----- ----- ----- ----- ----- ----- ----- Opening FUM Gross Redemptions Net Other Market & Net Closing inflows inflows movements currency movement FUM movements in FUM £m £m £m £m £m £m £m £m2004 movementrelative to 2003M&GM&G branded retail 16% 68% (53%) 140% - (10%) 14% 16%investment productsPrudential branded 17% 11% (29%) (2600%) - (51%) (65%) 5%UK retail investmentproducts (6)M&G institutional 22% 50% (63%) 36% - (1%) 22% 22%(4)(7) ----- ----- ----- ----- ----- ----- ----- -----Total M&G 19% 54% (57%) 48% 1136% (8%) 15% 19% ----- ----- ----- ----- ----- ----- ----- -----AsiaIndia 49% 21% (31%) (90%) 69% (53%) (86%) 5%Taiwan 10% (24%) 8% (328%) - 89% (461%) (33%)Korea (6%) (9%) 27% 4260% (68%) 320% 922% 53%Other Mutual Fund 146% 151% (15%) 230% - (245%) 229% 195%Operations ----- ----- ----- ----- ----- ----- ----- -----Total Asian Mutual 26% 4% (6%) (22%) 32% 238% (9%) 19%Fund Operations ----- ----- ----- ----- ----- ----- ----- -----Hong Kong MPF 44% 3% (37%) (9%) - - (20%) 24%Products (8) ----- ----- ----- ----- ----- ----- ----- -----Total Asian Investment 26% 4% (6%) (21%) 32% 253% (9%) 19%Operations ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total Investment 21% 12% (13%) 11% 177% (2%) 9% 19%Products ----- ----- ----- ----- ----- ----- ----- ----- US (9) FY 2004 FY 2003 +/- (%) £m £mCurian CapitalExternal Funds 550 139 296%under Management ----- ----- ----- Schedule 3 PRUDENTIAL PLC - NEW BUSINESS - QUARTER 4 2004 VERSUS QUARTER 4 2003 (10) INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) Q4 2004 Q4 2003 +/- (%) Q4 2004 Q4 2003 +/- (%) Q4 2004 Q4 2003 +/- (%) Q4 2004 Q4 2003 +/- (%) £m £m £m £m £m £m £m £mUK InsuranceOperations : (4)Direct toCustomer:Individual 2 1 100% 2 2 0% 4 3 33% 2 2 0%PensionsLife - With 2 3 (33%) - - - 2 3 (33%) 0 0 0%Profit BondLife - Other - - - - 1 - - 1 - - 1 -Individual 166 138 20% - - - 166 138 20% 17 14 21%Annuities ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 170 142 20% 2 3 33% 172 145 19% 19 17 12%DWP Rebates 13 - - - - - 13 - - 1 - - ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 183 142 29% 2 3 33% 185 145 28% 20 17 18% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Business toBusiness:Corporate 45 39 15% 33 30 10% 78 69 13% 38 34 12%PensionsIndividual 68 56 21% - - - 68 56 21% 7 6 17%AnnuitiesBulk Annuities 222 98 127% - - - 222 98 127% 22 10 120% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Total 335 193 74% 33 30 10% 368 223 65% 67 49 37% ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----IntermediatedDistribution :Individual 10 11 (9%) 1 4 (75%) 11 15 (27%) 2 5 (60%)PensionsCorporate 7 29 (76%) 2 1 100% 9 30 (70%) 3 4 (25%)PensionsLife - With 43 162 (73%) - - - 43 162 (73%) 4 16 (75%)Profit BondLife - Other Bond 250 114 119% - - - 250 114 119% 25 11 127%Life - Other - - - 1 2 (50%) 1 2 (50%) 1 2 (50%)Individual 326 233 40% - - - 326 233 40% 33 23 43%Annuities ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----Sub-Total 636 549 16% 4 7 (43%) 640 556 15% 68 62 10%DWP Rebates ( 3) 43 (107%) - - - ( 3) 43 (107%) ( 0) 4 (100%)Related Shares:
Prudential