Business Context and Reporting Period
Company: Prudential plc (PRU)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Full Year ended 31 December 2024
Announcement Date: 20 March 2025
Prudential plc, a leading life and health insurer and asset manager operating across 24 markets in Asia and Africa, reported its full-year 2024 results. The company is executing a strategy focused on operational capabilities, customer experience, and growth in its agency and bancassurance channels.
Key Financial Metrics
| Metric | 2024 Value | 2023 Value | Change (CER) |
|---|---|---|---|
| New Business Profit (NBP) | $3,078 million | $3,125 million | +11% |
| Operating Free Surplus Generated | $2,642 million | $2,740 million | -2% |
| Adjusted Operating Profit (Pre-tax) | $3,129 million | $2,893 million | +10% |
| Adjusted Operating Profit (Post-tax) | $2,582 million | $2,449 million | +7% |
| IFRS Profit After Tax | $2,415 million | $1,712 million | +43% |
| Group EEV Equity | $44.2 billion | $45.3 billion | -2% (AER) |
| Earnings Per Share (Adjusted) | 89.7 cents | 89.0 cents | +8% |
| Dividend Per Share | 23.13 cents | 20.47 cents | +13% |
Liquidity and Capital: The Free Surplus Ratio stands at 234%. The Group-wide Solvency (GWS) shareholder surplus over GPCR is $15.9 billion, representing a cover ratio of 280%. Eastspring Investments reported Funds Under Management (FUM) of $258 billion.
Material Changes vs. Prior Period
- New Business Profit: Increased 11% on a constant exchange rate (CER) basis, driven by growth in agency and bancassurance channels. On an actual exchange rate (AER) basis, NBP was flat due to currency movements.
- Profitability: Adjusted operating profit before tax rose 10% (CER), while IFRS profit after tax surged 41% (AER) and 43% (CER), reflecting strong underlying performance and favorable accounting adjustments.
- Channel Performance: Bancassurance new business profit grew 31%. Agency active agent count increased to 67,000 in H2 2024 from 63,000 in H1 2024.
- Capital Return: Total shareholder returns in FY24 reached $1.4 billion, comprising a 13% increase in dividends and $785 million in share buybacks.
Outlook, Guidance, and Risks
Guidance and Outlook
- 2025 Growth Targets: Management expects growth of more than 10% in 2025 (CER basis) for New Business Profit, Basic EPS (adjusted), and Operating Free Surplus Generated.
- Dividend Policy: Dividend per share is expected to increase by at least 10% in 2025.
- Share Buyback: The $2 billion buyback programme is now expected to complete by the end of 2025, accelerated from the original mid-2026 guidance. $1,045 million has been completed as of 14 March 2025.
- Strategic Divestment: The company is evaluating a potential listing of ICICI Prudential Asset Management Company Limited, with net proceeds intended for shareholder return.
Risks and Contingencies
- Market Conditions: Risks include fluctuations in interest rates, exchange rates, and inflation, which impact asset valuations and policyholder behavior.
- Geopolitical Factors: Ongoing conflicts (Russia-Ukraine, Middle East) and tensions between China and the US pose risks to trade, capital movements, and economic stability.
- Operational & Cyber: Risks related to IT infrastructure, cyber-attacks, and the integration of AI tools.
- Regulatory: Changes in capital, solvency, and sustainability reporting standards across multiple jurisdictions.
Investor Verification Checklist
- Buyback Acceleration: Verify the timeline and execution of the $2 billion share buyback programme completion by end-2025.
- ICICI Prudential Listing: Monitor progress on the potential partial divestment/listing of ICICI Prudential Asset Management Company Limited.
- 2025 Growth Inflection: Track Q1 and H1 2025 results to confirm the anticipated >10% growth in NBP and Free Surplus.
- Agency Channel Metrics: Review continued growth in active agent counts and productivity (NBP per agent) in subsequent quarters.
- Capital Ratios: Confirm the Free Surplus Ratio remains above 200% post-dividend and buyback completion.