Business Context and Reporting Period
Company: Prudential plc (HKEX: 2378; LSE: 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 Asia and Africa, reported full-year 2024 results. The company is executing a strategy focused on Customer, Distribution, and Health pillars, aiming to achieve 2027 strategic objectives. The results reflect a return to underlying growth trends in Asia and Africa markets following the post-pandemic recovery.
Key Financial Metrics
| Metric | 2024 ($m) | 2023 ($m) | Change (CER*) |
|---|---|---|---|
| New Business Profit (NBP) | 3,078 | 3,125 | +11% |
| Operating Free Surplus Generated | 2,642 | 2,740 | -2% |
| Adjusted Operating Profit (Pre-tax) | 3,129 | 2,893 | +10% |
| Adjusted Operating Profit (Post-tax) | 2,582 | 2,449 | +7% |
| IFRS Profit After Tax | 2,415 | 1,712 | +43% |
| Group EEV Equity | 44,218 | 45,250 | -2% (AER) |
| Free Surplus Ratio | 234% | 242% | -8 ppts |
| Dividend Per Share (Total) | 23.13 cents | 20.47 cents | +13% |
*CER: Constant Exchange Rate basis. NBP growth excludes interest rate and other economic movements.
Material Changes vs. Prior Period
- New Business Profit: Increased 11% on a constant exchange rate basis (excluding economic movements), driven by higher Annual Premium Equivalent (APE) sales and improved margins. Growth was led by Hong Kong, Singapore, and Taiwan. Including economic movements, NBP was broadly flat.
- Operating Free Surplus: Declined 2% to $2.642 billion, primarily due to the monetization of lower sales volumes from prior years (2019-2022) affected by pandemic restrictions. This aligns with the expected cash flow shape through 2027.
- IFRS Profit: Rose 41% to $2.415 billion, largely due to improved operating earnings and a moderation in short-term market fluctuations compared to 2023.
- Malaysia Non-Controlling Interest: Following a Federal Court ruling in July 2024, the Group now reflects a 49% non-controlling interest in its Malaysia conventional life business (PAMB), whereas it previously consolidated 100% economic interest. This adjustment reduced Group EEV equity and IFRS shareholders' equity.
- Share Buybacks: The Group accelerated its $2 billion share buyback programme, completing $1.045 billion (123 million shares) by 14 March 2025. Completion is now expected by end-2025, ahead of the original mid-2026 guidance.
Guidance, Outlook, and Risks
Outlook and Guidance
- 2025 Growth Targets: Prudential expects to grow New Business Profit, basic earnings per share (based on adjusted operating profit), and operating free surplus generated by more than 10% in 2025 (on a constant exchange rate basis).
- Dividend Guidance: The dividend per share is expected to increase by at least 10% in 2025.
- Strategic Inflection: 2025 is viewed as the inflection point for growth in gross operating free surplus generation.
- Reporting Change: The Group will convert from European Embedded Value (EEV) to Traditional Embedded Value (TEV) reporting starting Q1 2025 to improve comparability with peers and reduce economic volatility.
Management Commentary
CEO Anil Wadhwani highlighted progress in operational capabilities and growth execution. Key drivers include improved cash signatures for new business, growth in active agents, and actions to improve variances through better health claims management and IT modernization. The Group is evaluating a potential listing of ICICI Prudential Asset Management Company Limited, with net proceeds intended for shareholder return.
Risks and Contingencies
- Macroeconomic & Geopolitical: Risks include interest rate volatility, inflation, geopolitical tensions (e.g., US-China relations, conflicts in Ukraine/Middle East), and protectionist policies.
- Market Specifics: Mainland China faces challenges from falling bond yields and regulatory changes. Vietnam faces regulatory disruption. Medical inflation remains a key risk in health markets.
- Operational & Cyber: Risks related to transformation projects, third-party outsourcing, and cyber security threats (including AI-generated deepfakes) are monitored closely.
- Regulatory: Changes in capital, solvency, and tax regimes (including OECD Pillar Two global minimum tax) across jurisdictions.
Investor Verification Checklist
- Malaysia NCI Impact: Verify the specific impact of the 49% non-controlling interest adjustment on future earnings per share and equity metrics.
- Buyback Acceleration: Confirm the timeline and remaining capacity of the accelerated $2 billion share buyback programme (targeting end-2025 completion).
- TEV Transition: Review the methodology and impact of the transition from EEV to TEV reporting in Q1 2025 on future embedded value metrics.
- ICICI Prudential Listing: Monitor progress on the potential listing of ICICI Prudential Asset Management Company Limited and the expected timeline for capital return.
- 2025 Growth Execution: Track Q1 2025 results to validate the >10% growth guidance for NBP and operating free surplus.