3rd Quarter Results

Prudential PLC 16 October 2003 Embargo: 07.00 hrs Thursday 16 October 2003 PRUDENTIAL PLC THIRD QUARTER 2003 NEW BUSINESS RESULTS • Total Group insurance and investment sales of £23.6 billion, an increase of 12 per cent at constant exchange rates (CER) on the first nine months of 2002 (6 per cent on actual exchange rates). Group APE (Annual Premium Equivalent) insurance sales of £1.2 billion are down 10 per cent at CER (down 14 per cent on actual exchange rates). • Total Group investment funds under management of £29.7 billion, up 16 per cent since the beginning of 2003. • APE insurance sales in Prudential Corporation Asia (PCA) up 17 per cent, despite the impact of SARS earlier in the year (up 9 per cent on actual exchange rates). • Jackson National Life's (JNL) retail sales of £2.8 billion at CER were 1 per cent higher than the comparable period in 2002, with particularly strong sales of variable annuities. • UK insurance sales on an APE basis down 16 per cent, reflecting weakness in the with-profit bond market. Strong sales of corporate pensions and individual annuities. • M&G total retail and institutional funds under management of £23.2 billion, up 14 per cent since the start of the year. Prudential's Group Chief Executive, Jonathan Bloomer, commented: 'The markets in which we operate have been difficult this year. In the UK, consumer confidence has not yet fully recovered, in the US, the low interest rate environment continues, and in Asia, SARS has affected several key territories. However, market conditions are beginning to stabilise and we are now seeing signs of improvement and the emergence of some positive trends including: increased sales of corporate pensions in the UK; good sales of variable annuities in the US; and a return to strong growth in Asia.' * The narrative below is on constant exchange rates throughout. See Notes to Editors for further details. Prudential Corporation Asia In the first nine months of the year PCA had APE sales of £391 million, up 17 per cent on the same period last year. This strong result demonstrates the benefits of PCA's diverse portfolio of businesses across Asia. Sales have recovered strongly post SARS and APE sales in the third quarter were £148 million, up 33 per cent on the second quarter of 2003. In Singapore, PCA has continued to focus on more profitable regular premium life business and for the first nine months of the year sales were up 27 per cent compared with the same period last year. Strong growth continued in Malaysia where APE sales in the first nine months of the year were up 25 per cent and in Hong Kong, despite record high unemployment levels and concerns over SARS, sales of single premium products in the first nine months of 2003 were 61 per cent higher than the same period in 2002. As announced on 1 September 2003, PCA Life Japan is now focusing on its financial adviser distribution channel and its bancassurance arrangements. While APE sales for the third quarter were up 44 per cent compared with the second quarter, PCA Life Japan anticipates some slowdown in the fourth quarter as the distribution model is refocused. PCA's Taiwanese life business made a strong recovery in the third quarter with APE sales up 71 per cent on the second quarter. However, due to the impact of SARS earlier in the year, sales for the first nine months of the year were up 2 per cent relative to 2002. PCA's seven smaller life operations (China, India, Indonesia, Korea, the Philippines, Thailand and Vietnam - collectively classified as 'Other' in the schedules) continue to build scale with APE sales increasing by 61 per cent compared with the same period last year. In China, PCA opened its second life operation with its partner CITIC. This was launched in August in Beijing. In Korea, bancassurance arrangements were launched with Koram Bank and Korea First Bank. Total investment products funds under management in Asia as at 30 September 2003 were £6.5 billion, up 10 per cent from £5.9 billion at 30 June 2003. This reflects strong net inflows of £395 million during the quarter and the impact of positive market movements. Jackson National Life JNL's retail sales of £2.8 billion were 1 per cent higher than the comparable period in 2002, which was a record year. Total sales for the first nine months of the year were down 19 per cent on prior year, reflecting a 62 per cent reduction in sales of institutional products to £499 million as a result of JNL's focus on retail markets. JNL does not expect to sell any further institutional products before 2004, other than on an opportunistic basis. JNL recorded excellent variable annuity sales during the first nine months of 2003. Total sales of £1.5 billion were up 88 per cent on the same period last year. As expected given the volatility of equity markets over the previous three years, a significant proportion of variable annuity investors continue to elect the fixed option, with 53 per cent of variable annuity sales going into this option during the first nine months of 2003. This compares to 58 per cent during the full year 2002 and 57 per cent for the first six months of 2003. Due to the continued low interest rate environment in the US and the high rate of election of the fixed account option within variable annuities, fixed annuity sales in the first nine months of the year of £1.2 billion were 37 per cent below prior year. Prudential has previously indicated that JNL would self-fund its capital in the medium-term. Consistent with this objective, third quarter fixed annuity sales of £200 million were 52 per cent down on sales of £421 million during the second quarter, and were 76 per cent lower than the comparable period in 2002. While JNL's outlook for the financial markets remains cautious, it expects to sell £250-300 million of fixed annuities in the fourth quarter, reflecting its expected capital position. Sales of equity-linked indexed annuities of £184 million were down 2 per cent on the first nine months of last year. Regular premium life sales of £11 million compared with sales of £17 million for the same period in 2002. Curian Capital LLC, JNL's recently launched Registered Investment Advisor channel, continued to build on its strong start. At the end of September, funds under management had grown to £73 million, more than double the funds under management at the half year. Curian Capital provides innovative fee-based separately managed accounts and investment products. In March 2003 JNL introduced a new equity-linked annuity product, and since June 2003 it has also launched new term and universal life products. These new developments reinforce JNL's track record of product innovation, with 92 per cent of sales in the first nine months of the year coming from products launched since the beginning of 2002. JNL intends to continue its focus on retail sales for the remainder of the year. UK and Europe Insurance Operations Prudential UK and Europe's APE sales for the first nine months of the year were £464 million, 18 per cent down on the comparative period in 2002. Excluding with-profit bond sales, Prudential UK's APE sales were 6 per cent higher than the same period in 2002 benefiting from continuing strong corporate pension and individual annuity sales. Sales through direct channels were £243 million, 15 per cent higher than the equivalent period in 2002, with strong sales of individual annuities and corporate pensions. Sales of individual annuities through direct channels were 11 per cent higher than in the same period in 2002 and in the first half of 2003 Prudential UK had a 22 per cent market share of the individual annuity market (source: ABI). Sales of corporate pensions through direct channels were £136 million, 23 per cent higher than 2002, reflecting a significant contribution from new schemes. In the first half of 2003 Prudential UK had an 18 per cent market share of the defined contribution occupational pension scheme market (source: ABI). IFA sales were down 38 per cent to £208 million. Despite the weak with-profit bond market Prudential achieved a strong performance with a 59 per cent increase in sales of with-profit bonds through IFAs in the third quarter over the second. This reflects a slow return to this market by high net worth investors. Prudential UK is seeking to improve confidence in with-profit bonds through a number of measures including product enhancement and improved transparency. In the first half of 2003 Prudential UK had a 26 per cent market share of with-profit bond sales distributed through IFAs (source: ABI), which it believes will have increased in the third quarter. Partnership agreements with Abbey to sell with-profit bonds, and with Zurich to underwrite annuities, resulted in single premium sales of £81 million for the first nine months of 2003. Partnership sales in the third quarter of £36 million compare with £13 million achieved in the second. The Zurich agreement was launched during the second quarter of 2003. Prudential UK expects conditions in the final quarter of the year to remain challenging, but believes its focus is appropriate. It is confident it is well positioned to take advantage of the recovery in the savings market. It continues to focus on products where it has competitive advantage as a result of its brand recognition, financial strength, diversified distribution capability and low cost base. M&G M&G's gross fund inflows for the first nine months of 2003 were £3 billion, up 1 per cent on 2002, reflecting its strength and broad distribution in the areas of retail fund management, institutional fixed income, pooled life and pension funds, property and private finance. Gross fund inflows into M&G branded retail products were £275 million in the third quarter, up 10 per cent on the same period last year. Net inflows rose in the quarter, up 8 per cent on the same period in 2002 to £64 million. In its institutional business, M&G continued to benefit from its position as a leading innovator in fixed income and private finance. Gross institutional fund inflows during the third quarter were £702 million, bringing inflows in the first nine months to £2.1 billion, 5 per cent higher than the same period last year. During the third quarter, M&G's segregated and pooled funds saw gross fund inflows of £317 million and the private finance division contributed a further £333 million as a result of its continuing success in winning project finance and securitised vehicle mandates. M&G's net institutional fund inflows for the third quarter of 2003 were £284 million compared to £59 million in the same period in 2002. Egg Egg will announce its third quarter results on Wednesday 22 October 2003. -ENDS- Enquiries to: Media Investors/Analysts Geraldine Davies 020 7548 3911 Rebecca Burrows 020 7548 3537 Steve Colton 020 7548 3721 Laura Presland 020 7548 3511 Clare Staley 020 7548 3719 Notes to Editors: 1. There will be a conference call today for wire services hosted by Jonathan Bloomer, Group Chief Executive, and Philip Broadley, Group Finance Director at 8.00am (dial-in telephone number: +44 (0) 20 8288 4500). Callers to quote 'Prudential' for access to the call. 2. There will be a conference call for investors and analysts hosted by Jonathan Bloomer at 2.30pm (dial-in telephone number: +44 (0) 20 7162 0189, US callers +1 334 420 4951). Callers to quote 'Prudential Q3 new business results' for access to the call. A recording of this call will be available for five working days by dialling: UK: 020 8288 4459, US: +1 334 323 6222, access code 817812. 3. Sales for overseas operations have been reported using average exchange rates as shown in the attached schedules. Commentary is given on the results on a constant exchange rate basis. The two bases are compared in the table below. Annual Premium Equivalent Sales Actual exchange rates Constant exchange rates 2003 YTD £m 2002 YTD £m +/- (%) 2003 YTD £m 2002 YTD £m +/- (%) UK and Europe 464 568 (18%) 464 568 (18%) US 342 464 (26%) 342 426 (20%) Asia 391 358 9% 391 334 17% Total 1,197 1,390 (14%) 1,197 1,328 (10%) Gross Inflows Actual exchange rates Constant exchange rates 2003 YTD £m 2002 YTD £m +/- (%) 2003 YTD £m 2002 YTD £m +/- (%) M&G 3,024 2,981 1% 3,024 2,981 1% Asia 13,309 9,832 35% 13,309 9,142 46% Total 16,333 12,813 27% 16,333 12,123 35% Total Insurance and Investment New Business Actual exchange rates Constant exchange rates 2003 YTD £m 2002 YTD £m +/- (%) 2003 YTD £m 2002 YTD £m +/- (%) Insurance 7,270 9,398 (23%) 7,270 8,992 (19%) Investment 16,333 12,813 27% 16,333 12,123 35% Total 23,603 22,211 6% 23,603 21,115 12% 4. Annual premium equivalent (APE) sales comprise regular premium sales plus one-tenth of single premium insurance sales. 5. 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 2002 (£16 million for the first nine months of 2002). 6. 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. 7. Financial Calendar: 2003 Payment of interim dividend Friday 31 October 2003 2004 2003 Full-year New Business Figures Thursday 22 January 2004 2003 Full-year Results Tuesday 24 February 2004 Ex-dividend date Wednesday 17 March 2004 Record date Friday 19 March 2004 First quarter New Business Figures Friday 23 April 2004 Annual General Meeting Thursday 6 May 2004 Payment of 2003 final dividend Wednesday 26 May 2004 2004 Interim Results/Second quarter New Business Figures Tuesday 27 July 2004 Forward-Looking Statements This statement may contain certain 'forward-looking statements' with respect to certain of Prudential's plans and its current goals and expectations relating to its 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. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond Prudential's control including among other things, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, and the performance of financial markets generally; the policies and actions of regulatory authorities, the impact of competition, inflation, and deflation; experience in particular with regard to mortality and morbidity trends, lapse rates and policy renewal rates; the timing, impact and other uncertainties of future acquisitions or combinations within relevant industries; and the impact of changes in capital, solvency or accounting standards, and tax and other legislation and regulations in the jurisdictions in which Prudential and its affiliates operate. This may for example result in changes to assumptions used for determining results of operations or re-estimations of reserves for future policy benefits. As a result, Prudential's actual future financial condition, performance and results may differ materially from the plans, goals, and expectations set forth in Prudential's forward-looking statements. Prudential undertakes no obligation to update the forward-looking statements contained in this statement or any other forward-looking statements it may make. Schedule 1 PRUDENTIAL PLC - NEW BUSINESS - NINE MONTHS 2003 TOTAL INSURANCE AND INVESTMENT NEW BUSINESS UK & Europe US (1) Asia (1) Total 2003 2002 +/- 2003 2002 +/- 2003 2002 +/- 2003 2002 +/- Q3 YTD Q3 YTD (%) Q3 YTD Q3 YTD (%) Q3 YTD Q3 YTD (%) Q3 YTD Q3 YTD (%) £m £m £m £m £m £m £m £m Total Insurance Products 3,293 4,261 (23%) 3,318 4,483 (26%) 659 654 1% 7,270 9,398 (23%) Total Investment Products - 3,024 2,981 1% - - - 13,309 9,832 35% 16,333 12,813 27% Gross Inflows (2) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Group Total 6,317 7,242 (13%) 3,318 4,483 (26%) 13,968 10,486 33% 23,603 22,211 6% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) 2003 2002 +/- 2003 2002 +/- 2003 2002 +/- 2003 2002 +/- Q3 YTD Q3 YTD (%) Q3 YTD Q3 YTD (%) Q3 YTD Q3 YTD (%) Q3 YTD Q3 YTD (%) £m £m £m £m £m £m £m £m UK Insurance Operations : (4) Direct Distribution : Individual Pensions 7 13 (46%) 7 9 (22%) 14 22 (36%) 8 10 (20%) Corporate Pensions 386 324 19% 97 79 23% 483 403 20% 136 111 23% Life 10 51 (80%) 2 3 (33%) 12 54 (78%) 3 8 (63%) Individual Annuities 687 621 11% - - - 687 621 11% 69 62 11% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 1,090 1,009 8% 106 91 16% 1,196 1,100 9% 215 192 12% DWP Rebates 280 195 44% - - - 280 195 44% 28 20 40% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 1,370 1,204 14% 106 91 16% 1,476 1,295 14% 243 211 15% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Intermediated Distribution : Individual Pensions 42 74 (43%) 19 27 (30%) 61 101 (40%) 23 34 (32%) Corporate Pensions 38 70 (46%) 5 12 (58%) 43 82 (48%) 9 19 (53%) Life 721 1,793 (60%) 20 12 67% 741 1,805 (59%) 92 191 (52%) Individual Annuities 596 597 - - - - 596 597 - 59 60 (2%) Bulk Annuities 189 286 (34%) - - - 189 286 (34%) 19 29 (34%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 1,586 2,820 (44%) 44 51 (14%) 1,630 2,871 (43%) 202 333 (39%) DWP Rebates 60 45 33% - - - 60 45 33% 6 5 20% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 1,646 2,865 (43%) 44 51 (14%) 1,690 2,916 (42%) 208 338 (38%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Partnerships : Life 53 - - - - - 53 - - 5 - - Individual Annuities 28 - - - - - 28 - - 3 - - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 81 - - - - - 81 - - 8 - - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total : Individual Pensions 49 87 (44%) 26 36 (28%) 75 123 (39%) 31 45 (31%) Corporate Pensions 424 394 8% 102 91 12% 526 485 8% 145 130 12% Life 784 1,844 (57%) 22 15 47% 806 1,859 (57%) 100 199 (50%) Individual Annuities 1,311 1,218 8% - - - 1,311 1,218 8% 131 122 7% Bulk Annuities 189 286 (34%) - - - 189 286 (34%) 19 29 (34%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 2,757 3,829 (28%) 150 142 6% 2,907 3,971 (27%) 426 525 (19%) DWP Rebates 340 240 42% - - - 340 240 42% 34 24 42% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total UK Insurance 3,097 4,069 (24%) 150 142 6% 3,247 4,211 (23%) 460 549 (16%) Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- European Insurance Operations : (1) Insurance Products 46 34 35% - 16 - 46 50 (8%) 5 19 (74%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total European Insurance 46 34 35% - 16 - 46 50 (8%) 5 19 (74%) Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total UK & European 3,143 4,103 (23%) 150 158 (5%) 3,293 4,261 (23%) 464 568 (18%) Insurance Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- US Insurance Operations : (1) Fixed Annuities 1,153 1,978 (42%) - - - 1,153 1,978 (42%) 115 198 (42%) Equity-Linked Indexed 184 204 (10%) - - - 184 204 (10%) 18 20 (10%) Annuities Variable Annuities 1,471 852 73% - - - 1,471 852 73% 147 85 73% Life - - - 11 18 (39%) 11 18 (39%) 11 18 (39%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total Retail 2,808 3,034 (7%) 11 18 (39%) 2,819 3,052 (8%) 292 321 (9%) Guaranteed Investment 192 297 (35%) - - - 192 297 (35%) 19 30 (37%) Contracts GIC - Medium Term Note 307 1,134 (73%) - - - 307 1,134 (73%) 31 113 (73%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total US Insurance 3,307 4,465 (26%) 11 18 (39%) 3,318 4,483 (26%) 342 464 (26%) Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Asian Insurance Operations : (1) Singapore 96 194 (51%) 40 33 21% 136 227 (40%) 50 52 (4%) Hong Kong 134 89 51% 55 62 (11%) 189 151 25% 68 71 (4%) Malaysia 9 11 (18%) 43 37 16% 52 48 8% 44 38 16% Taiwan 18 13 38% 94 100 (6%) 112 113 (1%) 96 101 (5%) Japan 7 7 - 33 29 14% 40 36 11% 34 30 13% Other (5) 34 15 127% 96 64 50% 130 79 65% 99 66 50% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Insurance 298 329 (9%) 361 325 11% 659 654 1% 391 358 9% Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Group Total 6,748 8,897 (24%) 522 501 4% 7,270 9,398 (23%) 1,197 1,390 (14%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Notes to Schedules : (1) Insurance and investment new business for overseas operations has been calculated using average exchange rates. The applicable rate for Jackson National Life is 1.6110 (2002 - 1.4798). (2) Represents cash received from sale of investment products. (3) Annual Equivalents, calculated as regular new business contributions + 10% single new business contributions, are subject to roundings. (4) Reflecting the expanded investment business new business analysis on Schedule 2, certain investment fund mandates previously classified from UK Corporate Pensions sales are now reported as M&G institutional funds under management. 2002 UK insurance sales now reflect this change in presentation. (5) In Asia, 'Other' insurance operations include Thailand, Indonesia, The Philippines, Vietnam, India (26% interest), China and Korea. Schedule 2 PRUDENTIAL PLC - NEW BUSINESS - NINE MONTHS 2003 INVESTMENT OPERATIONS Opening Gross Redemptions Net inflows Other Market & Net Closing FUM inflows movements currency movement FUM movements in FUM 2003 M&G (4) M&G branded retail 7,587 809 ( 612) 197 ( 14) 679 862 8,449 investment products Prudential branded UK 1,137 107 ( 107) - - 117 117 1,254 retail investment products (6) M&G institutional (7) 11,560 2,108 ( 1,120) 988 - 942 1,930 13,490 ---- ---- ---- ---- ---- ---- ---- ---- Total M&G 20,284 3,024 ( 1,839) 1,185 ( 14) 1,738 2,909 23,193 ---- ---- ---- ---- ---- ---- ---- ---- Asia India 1,372 5,261 ( 4,906) 355 ( 35) 160 480 1,852 Taiwan 2,425 5,707 ( 5,485) 222 - 65 287 2,712 Korea 993 1,768 ( 1,702) 66 ( 20) 36 82 1,075 Other Mutual Fund 306 517 ( 177) 340 - 31 371 677 Operations ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Mutual Fund 5,096 13,253 ( 12,270) 983 ( 55) 292 1,220 6,316 Operations ---- ---- ---- ---- ---- ---- ---- ---- Hong Kong MPF Products 136 56 ( 16) 40 - 10 50 186 (8) ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Investment 5,232 13,309 ( 12,286) 1,023 ( 55) 302 1,270 6,502 Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total Investment 25,516 16,333 ( 14,125) 2,208 ( 69) 2,040 4,179 29,695 Products ---- ---- ---- ---- ---- ---- ---- ---- Opening Gross Redemptions Net inflows Other Market & Net Closing FUM inflows movements currency movement FUM movements in FUM 2002 M&G M&G branded retail 8,890 858 ( 565) 293 ( 108) ( 1,694) ( 1,509) 7,381 investment products (9) Prudential branded UK 1,546 118 ( 150) ( 32) - ( 404) ( 436) 1,110 retail investment products (6) M&G institutional (7) 9,873 2,005 ( 624) 1,381 - ( 148) 1,233 11,106 ---- ---- ---- ---- ---- ---- ---- ---- Total M&G 20,309 2,981 ( 1,339) 1,642 ( 108) ( 2,246) ( 712) 19,597 ---- ---- ---- ---- ---- ---- ---- ---- Asia India 1,072 2,672 ( 2,535) 137 ( 20) ( 9) 108 1,180 Taiwan 2,076 6,922 ( 6,518) 404 - ( 231) 173 2,249 Korea - - - - - - - - Other Mutual Fund 57 180 ( 7) 173 - ( 7) 166 223 Operations ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Mutual Fund 3,206 9,774 ( 9,060) 714 ( 20) ( 247) 447 3,652 Operations ---- ---- ---- ---- ---- ---- ---- ---- Hong Kong MPF Products 90 58 ( 9) 49 - ( 18) 31 121 (8) ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Investment 3,296 9,832 ( 9,069) 763 ( 20) ( 265) 478 3,773 Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total Investment 23,605 12,813 ( 10,408) 2,405 ( 128) ( 2,511) ( 234) 23,370 Products ---- ---- ---- ---- ---- ---- ---- ---- Opening Gross Redemptions Net inflows Other Market & Net Closing FUM inflows movements currency movement FUM movements in FUM 2003 movement relative to 2002 M&G M&G branded retail (15%) (6%) (8%) (33%) 87% 140% 157% 14% investment products Prudential branded UK (26%) (9%) 29% - - 129% 127% 13% retail investment products (6) M&G institutional (7) 17% 5% (79%) (28%) - 736% 57% 21% ---- ---- ---- ---- ---- ---- ---- ---- Total M&G - 1% (37%) (28%) 87% 177% 509% 18% ---- ---- ---- ---- ---- ---- ---- ---- Asia India 28% 97% (94%) 159% (75%) 1878% 344% 57% Taiwan 17% (18%) 16% (45%) - 128% 66% 21% Korea - - - - - - - - Other Mutual Fund 437% 187% (2429%) 97% - 543% 123% 204% Operations ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Mutual Fund 59% 36% (35%) 38% (175%) 218% 173% 73% Operations ---- ---- ---- ---- ---- ---- ---- ---- Hong Kong MPF Products 51% (3%) (78%) (18%) - 156% 61% 54% (8) ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Investment 59% 35% (35%) 34% (175%) 214% 166% 72% Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total Investment Products 8% 27% (36%) (8%) 46% 181% 1886% 27% ---- ---- ---- ---- ---- ---- ---- ---- US BANKING PRODUCTS 2003 Q3 2002 Q3 YTD +/- (%) YTD £m £m US Banking Products (10) Total Deposit 666 658 1% Liabilities Retail Assets 689 674 2% Notes to Schedules : (4) Reflecting the expanded investment business new business analysis above, certain investment fund mandates previously classified from UK Corporate Pensions sales are now reported as M&G institutional funds under management. 2002 UK insurance sales now reflect this change in presentation. (6) Scottish Amicable and Prudential branded Investment Products. (7) Balance includes segregated pensions fund business, private finance flows and M&G South Africa institutional business. M&G institutional funds under management restated in Q2 2003 to include funds managed on behalf of the Prudential Staff Pension Scheme previously categorised as internal funds. (8) Mandatory Provident Fund product sales in Hong Kong are included at Prudential's 36% interest of the Hong Kong MPF operation. (9) Balance restated to include M&G South Africa retail investment operations. (10) Balance sheet figures have been calculated at closing exchange rates. Schedule 3 PRUDENTIAL PLC - NEW BUSINESS - QUARTER 3 2003 VERSUS QUARTER 3 2002 INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) Q3 Q3 +/- (%) Q3 Q3 +/- (%) Q3 Q3 +/- Q3 Q3 +/- (%) 2003 2002 2003 2002 2003 2002 (%) 2003 2002 £m £m £m £m £m £m £m £m UK Insurance Operations : (4) Direct Distribution : Individual Pensions 1 3 (67%) 2 2 - 3 5 (40%) 2 2 - Corporate Pensions 138 31 345% 27 25 8% 165 56 195% 41 28 46% Life 3 14 (79%) - 1 - 3 15 (80%) - 2 - Individual Annuities 215 230 (7%) - - - 215 230 (7%) 22 23 (4%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 357 278 28% 29 28 4% 386 306 26% 65 56 16% DWP Rebates - - - - - - - - - - - - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 357 278 28% 29 28 4% 386 306 26% 65 56 16% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Intermediated Distribution : Individual Pensions 9 17 (47%) 6 9 (33%) 15 26 (42%) 7 10 (30%) Corporate Pensions 15 18 (17%) 2 3 (33%) 17 21 (19%) 4 5 (20%) Life 280 443 (37%) 3 4 (25%) 283 447 (37%) 31 48 (35%) Individual Annuities 206 285 (28%) - - - 206 285 (28%) 21 29 (28%) Bulk Annuities 32 123 (74%) - - - 32 123 (74%) 3 13 (77%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 542 886 (39%) 11 16 (31%) 553 902 (39%) 65 105 (38%) DWP Rebates - - - - - - - - - - - - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 542 886 (39%) 11 16 (31%) 553 902 (39%) 65 105 (38%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Partnerships : Life 12 - - - - - 12 - - 1 - - Individual Annuities 24 - - - - - 24 - - 2 - - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 36 - - - - - 36 - - 3 - - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total : Individual Pensions 10 20 (50%) 8 11 (27%) 18 31 (42%) 9 13 (31%) Corporate Pensions 153 49 212% 29 28 4% 182 77 136% 45 33 36% Life 295 457 (35%) 3 5 (40%) 298 462 (35%) 32 50 (36%) Individual Annuities 445 515 (14%) - - - 445 515 (14%) 45 52 (13%) Bulk Annuities 32 123 (74%) - - - 32 123 (74%) 3 13 (77%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 935 1,164 (20%) 40 44 (9%) 975 1,208 (19%) 134 160 (16%) DWP Rebates - - - - - - - - - - - - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total UK Insurance 935 1,164 (20%) 40 44 (9%) 975 1,208 (19%) 134 160 (16%) Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- European Insurance Operations : (1) Insurance Products 17 7 143% - 6 - 17 13 31% 2 6 (67%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total European Insurance 17 7 143% - 6 - 17 13 31% 2 6 (67%) Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total UK & European 952 1,171 (19%) 40 50 (20%) 992 1,221 (19%) 136 166 (18%) Insurance Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- US Insurance Operations : (11) Fixed Annuities 200 925 (78%) - - - 200 925 (78%) 20 93 (78%) Equity Linked Indexed 72 75 (4%) - - - 72 75 (4%) 7 7 - Annuities Variable Annuities 561 368 52% - - - 561 368 52% 56 36 56% Life - - - 3 6 (50%) 3 6 (50%) 3 6 (50%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-total Retail 833 1,368 (39%) 3 6 (50%) 836 1,374 (39%) 86 142 (39%) Guaranteed Investment 6 15 (60%) - - - 6 15 (60%) 1 2 (50%) Contracts GIC - Medium Term Note 28 225 (88%) - - - 28 225 (88%) 3 22 (86%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total US Insurance 867 1,608 (46%) 3 6 (50%) 870 1,614 (46%) 90 166 (46%) Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Asian Insurance Operations : (1) Singapore 45 56 (20%) 14 12 17% 59 68 (13%) 18 17 6% Hong Kong 58 45 29% 21 19 11% 79 64 23% 27 24 13% Malaysia 3 4 (25%) 19 13 46% 22 17 29% 20 13 54% Taiwan 9 4 125% 30 50 (40%) 39 54 (28%) 31 50 (38%) Japan 2 2 - 13 11 18% 15 13 15% 13 11 18% Other (5) 17 7 143% 37 24 54% 54 31 74% 39 26 50% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Insurance 134 118 14% 134 129 4% 268 247 9% 148 141 5% Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Group Total 1,953 2,897 (33%) 177 185 (4%) 2,130 3,082 (31%) 373 473 (21%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- INVESTMENT OPERATIONS M&G (7) Asia Mutual Funds Hong Kong MPF Total Investment Products (8) Products Q3 Q3 +/- Q3 Q3 +/- Q3 Q3 +/- Q3 Q3 +/- 2003 2002 (%) 2003 2002 (%) 2003 2002 (%) 2003 2002 (%) £m £m £m £m £m £m £m £m Opening FUM 22,331 20,685 8% 5,721 3,781 51% 165 117 41% 28,217 24,583 15% Gross inflows 1,008 540 87% 4,929 3,144 57% 17 18 (6%) 5,954 3,702 61% Less redemptions ( 657) ( 381) (72%) (4,547)(3,086) (47%) ( 4) ( 3) (33%) (5,208)(3,470) (50%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Net flows 351 159 121% 382 58 559% 13 15 (13%) 746 232 222% Other movements - - - ( 25) ( 1) (2400%) - - - ( 25) ( 1) (2400%) Market and currency 511 (1,247) 141% 238 ( 186) 228% 8 ( 11) 173% 757 (1,443) 152% movements ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Net movement in FUM 862 (1,088) 179% 595 ( 129) 561% 21 4 425% 1,478(1,212) 222% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Closing FUM 23,193 19,597 18% 6,316 3,652 73% 186 121 54% 29,695 23,370 27% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Notes to Schedules : (1) Insurance and investment new business for overseas operations has been calculated using average exchange rates. (3) Annual Equivalents, calculated as regular new business contributions + 10% single new business contributions, are subject to roundings. (4) Reflecting the expanded investment business new business analysis on Schedule 2, certain investment fund mandates previously classified from UK Corporate Pensions sales are now reported as M&G institutional funds under management. 2002 UK insurance sales now reflect this change in presentation. (5) In Asia, 'Other' insurance operations include Thailand, Indonesia, The Philippines, Vietnam, India (26% interest), China and Korea. (7) Balance includes segregated pensions fund business, private finance flows and M&G South Africa institutional business. M&G institutional funds under management restated in Q2 2003 to include funds managed on behalf of the Prudential Staff Pension Scheme previously categorised as internal funds. (8) Mandatory Provident Fund product sales in Hong Kong are included at Prudential's 36% interest of the Hong Kong MPF operation. (11) Sales for overseas operations are converted to sterling using the year to date average exchange rate applicable at 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. Schedule 4 PRUDENTIAL PLC - NEW BUSINESS - QUARTER 3 2003 VERSUS QUARTER 2 2003 INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) Q3 2003 Q2 2003 +/- Q3 2003 Q2 2003 +/- Q3 2003 Q2 2003 +/- Q3 Q2 +/- (%) (%) (%) 2003 2003 (%) £m £m £m £m £m £m £m £m UK Insurance Operations : (4) Direct Distribution : Individual Pensions 1 3 (67%) 2 3 (33%) 3 6 (50%) 2 4 (50%) Corporate Pensions 138 52 165% 27 46 (41%) 165 98 68% 41 51 (20%) Life 3 3 - - 1 - 3 4 (25%) - 2 - Individual Annuities 215 201 7% - - - 215 201 7% 22 20 10% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 357 259 38% 29 50 (42%) 386 309 25% 65 76 (14%) DWP Rebates - - - - - - - - - - - - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 357 259 38% 29 50 (42%) 386 309 25% 65 76 (14%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Intermediated Distribution : Individual Pensions 9 16 (44%) 6 7 (14%) 15 23 (35%) 7 8 (13%) Corporate Pensions 15 11 36% 2 1 100% 17 12 42% 4 2 100% Life 280 207 35% 3 9 (67%) 283 216 31% 31 30 3% Individual Annuities 206 151 36% - - - 206 151 36% 21 15 40% Bulk Annuities 32 86 (63%) - - - 32 86 (63%) 3 9 (67%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 542 471 15% 11 17 (35%) 553 488 13% 65 64 2% DWP Rebates - - - - - - - - - - - - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 542 471 15% 11 17 (35%) 553 488 13% 65 64 2% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Partnerships : Life 12 9 33% - - - 12 9 33% 1 1 - Individual Annuities 24 4 500% - - - 24 4 500% 2 1 100% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 36 13 177% - - - 36 13 177% 3 2 50% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total : Individual Pensions 10 19 (47%) 8 10 (20%) 18 29 (38%) 9 12 (25%) Corporate Pensions 153 63 143% 29 47 (38%) 182 110 65% 45 53 (15%) Life 295 219 35% 3 10 (70%) 298 229 30% 32 32 - Individual Annuities 445 356 25% - - - 445 356 25% 45 36 25% Bulk Annuities 32 86 (63%) - - - 32 86 (63%) 3 9 (67%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 935 743 26% 40 67 (40%) 975 810 20% 134 141 (5%) DWP Rebates - - - - - - - - - - - - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total UK Insurance 935 743 26% 40 67 (40%) 975 810 20% 134 141 (5%) Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- European Insurance Operations : (1) Insurance Products 17 17 - - - - 17 17 - 2 2 - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total European 17 17 - - - - 17 17 - 2 2 - Insurance Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total UK & European 952 760 25% 40 67 (40%) 992 827 20% 136 143 (5%) Insurance Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- US Insurance Operations : (11) Fixed Annuities 200 421 (52%) - - - 200 421 (52%) 20 42 (52%) Equity Linked Indexed 72 68 6% - - - 72 68 6% 7 7 - Annuities Variable Annuities 561 468 20% - - - 561 468 20% 56 47 19% Life - - - 3 5 (40%) 3 5 (40%) 3 5 (40%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-total Retail 833 957 (13%) 3 5 (40%) 836 962 (13%) 86 101 (15%) Guaranteed Investment 6 186 (97%) - - - 6 186 (97%) 1 19 (95%) Contracts GIC - Medium Term Note 28 279 (90%) - - - 28 279 (90%) 3 28 (89%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total US Insurance 867 1,422 (39%) 3 5 (40%) 870 1,427 (39%) 90 147 (39%) Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Asian Insurance Operations : (1) Singapore 45 22 105% 14 14 - 59 36 64% 18 16 13% Hong Kong 58 42 38% 21 20 5% 79 62 27% 27 25 8% Malaysia 3 3 - 19 11 73% 22 14 57% 20 12 67% Taiwan 9 8 13% 30 17 76% 39 25 56% 31 18 72% Japan 2 2 - 13 8 63% 15 10 50% 13 8 63% Other (5) 17 10 70% 37 31 19% 54 41 32% 39 32 22% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Insurance 134 87 54% 134 101 33% 268 188 43% 148 110 35% Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Group Total 1,953 2,269 (14%) 177 173 2% 2,130 2,442 (13%) 373 400 (7%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- INVESTMENT OPERATIONS M&G (7) Asia Mutual Funds Hong Kong MPF Products Total Investment (8) Products Q3 2003 Q2 2003 +/- Q3 2003 Q2 2003 +/- Q3 2003 Q2 2003 +/- Q3 2003 Q2 2003 +/- (%) (%) (%) (%) £m £m £m £m £m £m £m £m Opening FUM 22,331 20,677 8% 5,721 5,022 14% 165 151 9% 28,217 25,850 9% Gross inflows 1,008 832 21% 4,929 4,552 8% 17 21 (19%) 5,954 5,406 10% Less redemptions ( 657) ( 627) (5%) (4,547) (3,854) (18%) ( 4) ( 8) 50% (5,208)(4,489) (16%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Net flows 351 205 71% 382 699 (45%) 13 12 8% 746 917 (19%) Other movements - ( 18) - ( 25) ( 16) (56%) - - - ( 25) ( 34) 26% Market and currency 511 1,466 (65%) 238 17 1300% 8 2 300% 757 1,485 (49%) movements ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Net movement in FUM 862 1,653 (48%) 595 698 (15%) 21 15 40% 1,478 2,367 (38%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Closing FUM 23,193 22,331 4% 6,316 5,721 10% 186 165 13% 29,695 28,217 5% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Notes to Schedules: (1) Insurance and investment new business for overseas operations has been calculated using average exchange rates. (3) Annual Equivalents, calculated as regular new business contributions + 10% single new business contributions, are subject to roundings. (4) Reflecting the expanded investment business new business analysis on Schedule 2, certain investment fund mandates previously classified from UK Corporate Pensions sales are now reported as M&G institutional funds under management. 2002 UK insurance sales now reflect this change in presentation. (5) In Asia, 'Other' insurance operations include Thailand, Indonesia, The Philippines, Vietnam, India (26% interest), China and Korea. (7) Balance includes segregated pensions fund business, private finance flows and M&G South Africa institutional business. M&G institutional funds under management restated in Q2 2003 to include funds managed on behalf of the Prudential Staff Pension Scheme previously categorised as internal funds. (8) Mandatory Provident Fund product sales in Hong Kong are included at Prudential's 36% interest of the Hong Kong MPF operation. (11) Sales for overseas operations are converted to sterling using the year to date average exchange rate applicable at 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. This information is provided by RNS The company news service from the London Stock Exchange

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