Achieved Profits Reporting

Prudential PLC
18 February 2002

Monday 18 February 2002




                 PRUDENTIAL PLC IMPLEMENTS NEW ABI GUIDANCE FOR

                        ACHIEVED PROFITS BASIS REPORTING


The Association of British Insurers (ABI) issued new guidance for Achieved
Profits in December 2001. Prudential prepares its Achieved Profits results in
accordance with ABI guidance and will adopt its new guidance for reporting its
2001 preliminary results.


The revised guidance requires the economic assumptions used for the projection
of cashflows to be on an 'active' basis, that is primarily based on appropriate
government bond returns at each period end. These assumptions will be reflected
in the profit reported for the year to 31 December 2001. Previously, Prudential
has used a 'passive' basis, which uses stable assumptions based on a long-term
economic view. Passive assumptions are revised only when it is judged that the
economic environment has changed substantially. Results prepared under the
Modified Statutory basis are not affected by this change.


The achieved profits results for 2001 will also reflect the changes in
assumptions that would have been made regardless of whether the active or
passive basis was being used.


Implementation of the active assumption basis


The implementation of the revised assumptions under the active basis will apply
primarily to the UK and the US operations, and those countries in Asia where
there are well-developed government bond markets (Japan, Korea and US$ business
in Hong Kong). Assumptions in other Asian territories will continue to be based
on an assessment of long-term economic conditions.


Key changes to economic assumptions arising from the implementation of the
active basis are as follows:-
                                          2001           2000
UK     Investment return                  7.1%           8.0%
       Risk discount rate                 7.7%           8.5%
US     (Jackson National Life)
       Risk discount rate                 7.7%           8.5%


The Group reports its 2001 preliminary results on 26 February 2002.


NOTES TO EDITORS:-


Although the 2000 numbers will not be restated, the ABI guidance requires
disclosure of how the changes in assumptions would have affected prior period
results. The effect on Europe and Asia would not have been significant. The
effect on the 2000 results of the UK and US businesses is estimated to be:

UK:                                                                        £m
            New business profit (pre-tax)                                  (22)
            In-force business operating profit (pre-tax)                   (68)
            AP shareholders' funds                                         (298)
                                                                        
USA:                                                                       £m
            New business profit (pre-tax)                                  22
            In-force business operating profit (pre-tax)                   (10)
            AP shareholders' funds                                         99




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