Interim Results - Part 2

PRUDENTIAL CORPORATION PLC
29 July 1999

Part 2

NOTES ON THE UNAUDITED RESULTS

(a) The results for the 1999 and 1998 half years are unaudited.  The results
for the 1998 full year have been derived from the Company's statutory 
accounts.  The auditors have reported on the 1998 statutory accounts and 
the accounts have been delivered to the Registrar of Companies.  The 
auditors' report was unqualified and did not contain a statement under 
section 237 (2) or (3) of the Companies Act 1985.
(b) The results for the 1999 half year have been prepared using the same 
accounting policies as were used in the 1998 statutory accounts, with the 
following exception.  Expected DSS Rebates for 1999 are recognised in full in 
Quarter One whereas previously Retail IFA included this business on a cash 
received basis. The Retail IFA figures for 1998 have accordingly been restated
on to the new basis resulting in an increase in both new business single 
premiums and gross premiums written of £31m.
(c) The long-term business profit of the UK operations has been calculated 
assuming the shareholder proportion of The Prudential Assurance Company 
Limited remains at 10%.  Provision has been made for possible reductions 
in bonus rates arising from the fund valuation at 31 December 1999.
(d) Acquisitions reported on page 9 relate to the Company's purchase of M&G 
Group PLC at the end of April 1999.  The total cost of the purchase was 
£1,943m.  Goodwill of £1,537m arising on the acquisition is being amortised 
on a straight-line basis over 20 years.
(e) Discontinued operations comprise the Company's Australasian operations 
which were sold in September 1998.
(f) Costs in respect of re-engineering the Company's UK operations relate 
principally to redundancy and related property, outsourcing and other costs.
(g) The statutory tax charge reported on page 9 comprised £32m (1998 £65m) UK 
tax and £65m (1998 £62m) overseas tax.
(h) New share capital subscribed in the 1998 half year and shareholders'
funds at 30 June 1998 reported on page 8 have been reduced by £19m from that 
previously published as a result of a change in accounting treatment of shares
issued to a qualifying share ownership trust.
(i) The UK operations general business operating result for the 1999 and
 1998 half years comprised:


       Gross                                              Operating profit
      premiums        Underwriting  Investment       (including longer term
      Written         result        return                investment gains)
      1999 £m 1998 £m 1999 £m 1998 £m    1999 £m 1998 £m*  1999 £m 1998 £m*
--------------------------------------------------------------------------
Home      140     140      19       7         12      12        31      19
Motor      21      19      (2)     (2)         3       3         1       1
--------------------------------------------------------------------------
Total     161     159      17       5         15      15        32      20
--------------------------------------------------------------------------
* Restated in accordance with note (j)

(j) Consistent with the Statement of Recommended Practice on Accounting for 
Insurance Business issued by the Association of British Insurers in December 
1998 and the accounting policy adopted for the 1998 full year results, 
investment returns credited to operating results, for investments
attributable to shareholders, are determined using the longer term rate of 
return or (by five year averaging of gains) an estimate thereof.  For 
general business and shareholders' other income, the only significant element 
relates to UK equities where the longer term rate of return (net of advance 
corporation tax credits) has been taken to be 8.1% (1998 half year 9.2 per
cent, 1998 full year 8.1 percent).  For long-term business, the only
significant element relates to fixed income securities held by Jackson
National Life where gains arising on the realisation of these investments
continue to be averaged over five years.In addition, within the profit and
loss account, the basis of allocation of investment return between the general
business technical account,long-term business technical account and
non-technical account has been altered so that balances on the technical
accounts are consistent with operating profits calculated on the new basis. 
Comparative results for the 1998 half year have been restated accordingly. 
The 1998 half year results previously published were prepared on the basis of
all such investment gains being recognised in operating results by five year
averaging.  In addition the basis of allocation of investment return between
the technical accounts and the non-technical account reflected unsmoothed
investment returns. The effect of the changes was explained in the 1998
Interim Report.  There was no impact on total profit before or after tax.

SUPPLEMENTARY ACHIEVED PROFITS BASIS RESULTS

                                                      Half year
                                                   ended 30 June   Full Year
Analysis by Business Area                         1999 £m  1998 £m   1998 £m
----------------------------------------------------------------------------
UK operations
Long-term business
     New business                                     145     131       220
     Business in force                                210     129       309
----------------------------------------------------------------------------
Total long-term business                              355     260       529
General business                                       32      20 *      39
Investment management and products                     21      25        28
Banking                                               (69)     (9)      (77)
----------------------------------------------------------------------------
Total UK Operations                                   339     296 *     519
----------------------------------------------------------------------------

Jackson National Life
----------------------------------------------------------------------------

New business                                           96      63       137
Business in force                                     152     132       231
----------------------------------------------------------------------------
Total Jackson National Life                           248     195       368
----------------------------------------------------------------------------


Prudential Asia
----------------------------------------------------------------------------  
   
Long-term business
     New business                                    34      16        56
     Business in force                               17      17        27
----------------------------------------------------------------------------
Total long-term business                             51      33        83
Development expenses                                 (7)     (4)      (10)
----------------------------------------------------------------------------
Total Prudential Asia                                44      29        73
----------------------------------------------------------------------------

Shareholders' other income
Investment return and other income                   78      81 *     202 
Interest payable                                    (63)    (49)      (46)
Corporate expenditure                               (19)    (19)     (105)
----------------------------------------------------------------------------
Total Shareholders' other income                     (4)     13 *      51
----------------------------------------------------------------------------
Re-engineering costs                                (55)      -         -
----------------------------------------------------------------------------
Total operating profit before amortisation 
of goodwill for continuing operations               572     533 *   1,011
----------------------------------------------------------------------------

* Restated for change in basis of recognition of investment returns, as 
explained in note (j) on page 10


SUPPLEMENTARY ACHIEVED PROFITS BASIS RESULTS

                                                  Half year
                                                Ended 30 June     Full year
Results summary                                  1999£m   1998 £m   1998 £m
----------------------------------------------------------------------------
Operating profit 
(including investment returns based on  
long-term rates of investment return)
Long-term Business
New Business                                       275       210       413
Business in force                                  372       274       557
----------------------------------------------------------------------------
Total long-term business                           647       484       970
General business                                    32        20  *     39
Investment management and products                  21        25        28
Banking                                            (69)       (9)      (77)
Shareholders' other income                          (4)       13  *     51
Re-engineering costs                               (55)        -         -
----------------------------------------------------------------------------
Total continuing operations                         572      533  *  1,011
Discontinued operations                             -          8        12
----------------------------------------------------------------------------
Operating profit before amortisation of goodwill    572      541 *   1,023
Amortisation of goodwill                            (14)      -         -
Short-term fluctuation in investment returns        340      460 *     289
Net loss from changes to UK projected long-term 
rate of investment
return and to UK and US risk discount rates          -        -       (106)
Profit on business disposals                         -        -        202 
Profit on ordinary activities before tax 
(including actual investment returns)               898    1,001     1,408
Tax                                                (253)    (299)    (371)
----------------------------------------------------------------------------
Profit for the period                               645      702     1,037
Dividends                                          (150)    (136)    (407)
----------------------------------------------------------------------------
Retained profit for the period                      495      566      630


Basic earnings per share
----------------------------------------------------------------------------
Based on operating profit after tax                 
before amortisation of goodwill of 
£412m (£377m* and £752m)                            21.1p    19.4p*   38.7p
Adjustment for amortisation of goodwill            (0.7)p      -        -     
       
Adjustment from post-tax longer term investment 
returns to post tax actual investment returns       12.7p    16.8p*   10.3p
Adjustment for changes to projected investment 
return and risk discount rates                          -       -     (4.1)p
Adjustment for profit on business disposals             -       -      8.5p
----------------------------------------------------------------------------
Based on profit for the period of 
£645m (£702m and £1,037m)                           33.1p    36.2p    53.4p
Average number of shares                           1,949m   1,941m   1,942m
----------------------------------------------------------------------------

Movement in shareholders' capital and reserves
----------------------------------------------------------------------------
Profit for the period                                645      702     1,037
Exchange movements                                   139      (40)      (75)
Goodwill on disposal of subsidiaries                   -        -        28
New share capital subscribed                          20        7        15
Dividends                                           (150)    (136)    (407)
----------------------------------------------------------------------------
Net increase in shareholders' capital and reserves   654      533       598
Shareholders' capital and reserves at beginning
of period                                          7,510    6,912     6,912
----------------------------------------------------------------------------
Shareholders' capital and reserves at end of 
period                                             8,164    7,445     7,510
----------------------------------------------------------------------------
* Restated for change in basis of recognition of investment returns, as 
  explained in note (j) on page 10



SUPPLEMENTARY ACHIEVED PROFITS BASIS RESULTS
                                                     30 June    31 December
Summarised Consolidated Balance Sheet            1999 £m   1998 £m   1998 £m
____________________________________________________________________________
Net Assets
Investments (non linked):
Equities                                         53,409    53,342    49,088
Fixed income securities                          40,122    32,200    35,622
Properties                                        7,970     7,130     7,298
Deposits with credit institutions                 4,603     3,519     3,917
Other investments*                                2,287     1,808     2,352
____________________________________________________________________________
Total investments                               108,391    97,999    98,277
Assets held to cover linked liabilities          15,483    10,889     9,737
Banking business assets                           8,029     1,116     2,397
Goodwill                                          1,582        59        59
Holding company cash less shareholders'
borrowings:
Holding company cash and short-term investments     135     1,622     1,826
Borrowings-Holding company                       (1,842)   (1,220)   (1,223)
          -Jackson National Life                   (159)     (150)     (150)
____________________________________________________________________________
                                                 (1,866)      252       453
Deferred acquisitions costs                       2,710     2,543     2,595
Dividend payable                                   (150)     (136)     (271)
Other net assets (liabilities)                     (929)     (220)       91
____________________________________________________________________________
                                                133,250   112,502   113,338
Long-term business technical provisions (net of
reinsurance) and fund for future appropriations
UK operations                                   (98,150)  (85,169)  (86,297)
Jackson National Life                           (21,529)  (18,819)  (19,423)
Prudential Asia                                  (1,997)   (1,203)   (1,615)
Discontinued operations                               -    (2,766)        -
____________________________________________________________________________
                                               (121,676) (107,957) (107,335)
Less:shareholders' accrued interest in the 
long-term business                                4,684     4,447     4,261
____________________________________________________________________________
Long-term business technical provisions (net of
reinsurance) and fund for future appropriations,
less shareholders' accrued interest            (116,992) (103,510) (103,074)
Banking business liabilities                     (7,633)   (1,043)   (2,271)
General business technical provisions              (461)     (504)     (483)
____________________________________________________________________________
Total net assets                                  8,164     7,445      7,510
____________________________________________________________________________

Shareholders' capital and reserves
____________________________________________________________________________
Share capital                                        98        97        98
Share premium                                       241       183       221
Statutory basis retained profit                   3,141     2,718     2,930
Additional reserves on the achieved profits basis 4,684     4,447     4,261
____________________________________________________________________________
Total shareholders' capital and reserves          8,164     7,445     7,510
____________________________________________________________________________
Comprising:
UK operations                                     4,984     4,108     3,957
Jackson National Life                             2,432     1,939     2,149
Prudential Asia                                     475       297       378
Discontinued operations                              -        258        - 
Other operations (including net shareholders'
cash)                                               273       843     1,026
____________________________________________________________________________
                                                  8,164     7,445     7,510
____________________________________________________________________________
* Other investments, which mainly comprise mortgages and loans to 
policyholders, are stated after deduction of amounts due by Jackson
National Life under sale and repurchase and funding agreements.

Notes on the supplementary achieved profits basis results
(a) The results have been prepared in accordance with the draft
 'Guidance on accounting in Group Accounts for proprietary companies'
long-term insurance business' issued by the Association of British Insurers
and are provided as a supplement to the statutory basis results contained 
in this report.
(b) The results for the 1999 and 1998 half years are unaudited.  The results
for the 1998 full year have been derived from the achieved profits basis 
results supplement to the Company's statutory accounts.  The supplement 
included an unqualified report from the auditors.  The results for UK 
investment products are now amalgamated with those for investment management.
Previously the results for investment products were included within the
business in force result for UK long-term business.  Comparative figures
have been restated accordingly.
(c) The results for the 1999 half year have been prepared using the same 
principal assumptions as were used for the 1998 full year.
(d) Consistent with note (h) on page 10, statutory basis retained profit at 30
June 1998 has been reduced by £19m as a result of a  change in accounting
treatment of shares issued to a qualifying  share ownership trust.

                                                                  Appendix

PRUDENTIAL CORPORATION PLC - 1999 NEW BUSINESS PREMIUMS - HALF YEAR

                              Single           Regular          Total
                         1999  1998  +/-  1999  1998  +/- 1999   1998   +/-
                          £m    £m   (%)   £m    £m   (%)  £m     £m    (%)
UK Operations
IFA Channel:
Individual Pensions      100   121  (17)   22   21    5     122   142  (14)
Corporate Pensions       424   253   68    35   30    17    459   283   62
Life                   1,018   719   42    39   32    22  1,057   751   41
Annuities                434   308   41     -    -     0    434   308   41
Investment Products      109    33  230     2    -     0    111    33  236
                       ---------------------------------------------------
Sub-Total              2,085 1,434   45    98   83    18  2,183 1,517   44
DSS Rebates               50    33   52     -    -     0     50    33   52
                       ---------------------------------------------------
Total                  2,135 1,467   46    98   83    18  2,233 1,550   44
                       ---------------------------------------------------
M&G (Direct):
Investment Products       54     -    0     2    -     0     56     -    0
                       ---------------------------------------------------
Total                     54     -    0     2    -     0     56     -    0
                       ---------------------------------------------------

Prudential Retail:
Individual Pensions       22    26  (15)   28   44   (36)    50    70  (29)
Corporate Pensions         4     2  100    20   25   (20)    24    27  (11)
Life                     435   300   45    28   30    (7)   463   330   40
Annuities                310   227   37     -    -     0    310   227   37
Investment Products       25    56  (55)    5    9   (44)    30    65  (54)
                       ---------------------------------------------------
Sub-Total                796   611   30    81  108   (25)   877   719   22
DSS Rebates              175   175    0     -    -     0    175   175    0
                       ---------------------------------------------------
Total                    971   786   24    81  108   (25) 1,052   894   18
                       ---------------------------------------------------

Total UK Operations:
Individual Pensions      122   147  (17)   50   65   (23)   172   212  (19)
Corporate Pensions       428   255   68    55   55     0    483   310   56
Life                   1,453 1,019   43    67   62     8  1,520 1,081   41
Annuities                744   535   39     -    -     0    744   535   39
Investment Products      188    89  111     9    9     0    197    98  101
                       ---------------------------------------------------
Sub-Total              2,935 2,045   44   181  191    (5) 3,116 2,236   39
DSS Rebates              225   208    8     -    -     0    225   208    8
                       ---------------------------------------------------
Total UK Operations    3,160 2,253   40   181  191    (5) 3,341 2,444   37
                       ---------------------------------------------------

Jackson National Life:
Fixed Annuities          313   382  (18)    -    -     0    313   382  (18)
Equity Linked 
Index Annuities          182   144   26     -    -     0    182   144   26
Variable Annuities       581   273  113     -    -     0    581   273  113
Guaranteed Investment
Contracts                636   708  (10)    -    -     0    636   708  (10)
GICs-European Medium 
Term Notes               337     -    0     -    -     0    337     -    0
Life                       -     -    0    12   14   (14)    12    14  (14)
                       ---------------------------------------------------
Sub-Total              2,049 1,507   36    12   14   (14) 2,061 1,521   36
                       ---------------------------------------------------

Prudential Asia:
Insurance Products        64    22  191    36   35     3    100    57   75
Investment Products      225    16 1306     -    -     0    225    16 1306
                       ---------------------------------------------------
Sub-Total                289    38  661    36   35     3    325    73  345
                       ---------------------------------------------------

Group Total:
Insurance Products     5,085 3,693   38   220  231    (5) 5,305 3,924   35
Investment Products      413   105  293     9    9     0    422   114  270
                       ---------------------------------------------------
Group Total            5,498 3,798   45   229  240    (5) 5,727 4,038   42    
                               
                       ---------------------------------------------------

                        1999  1998 
                         £m    £m
UK Banking Products
Funds Under Management:
Prudential Banking       717   955
egg:                   6,694    -
                       -----------
Total                  7,411   955
                       -----------

Mortgage Book:
Prudential Banking       932   422
egg:                     130    - 
                       -----------
Total                  1,062   422
                       -----------

General Insurance
UK Gross Premiums Written 161   159

                           Single               Regular           Total
                       1999   1998   +/-   1999  1998  +/-  1999   1998   +/-
                       £m     £m    (%)    £m    £m   (%)   £m     £m    (%)
UK Operations
Retail IFA:
Individual Pensions      85   121   (30)   21   21     0   106   142   (25)
Corporate Pensions       52    22   136     7    9   (22)   59    31    90
Life                   1,015  719    41    39   32    22 1,054   751    40
Annuities                 64   41    56     -    -     0    64    41    56
Investment Products       23   33   (30)    1    -     0    24    33   (27)
                       ---------------------------------------------------
Sub-Total              1,239  936    32    68   62    10 1,307   998    31
DSS Rebates               50   33    52     -    -     0    50    33    52
                       ---------------------------------------------------
Total                  1,289  969    33    68   62    10 1,357 1,031    32
                       ---------------------------------------------------

Prudential Corporate:
Corporate Pensions       372  231    61    28   21    33   400   252    59
Annuities                 70   74    (5)    -    -     0    70    74    (5)
                       ---------------------------------------------------
Total                    442  305    45    28   21    33   470   326    44
                       ---------------------------------------------------

Prudential Annuities:
Annuities                300  193    55     -    -     0   300   193    55

M&G IFA:
Individual Pensions       15    -     0     1    -     0    16    -      0
Life                       3    -     0     -    -     0     3    -      0
Investment Products       86    -     0     1    -     0    87    -      0
                       ---------------------------------------------------
Total                    104    -     0     2    -     0   106    -      0
                       ---------------------------------------------------

Total IFA Channel      2,135 1,467   46    98   83    18 2,233 1,550    44
                       ---------------------------------------------------

M&G Summary (IFA + Direct):
Individual Pensions       15     -    0     1    -     0    16    -      0
Life                       3     -    0     -    -     0     3    -      0
Investment Products      140     -    0     3    -     0   143    -      0
                       ---------------------------------------------------
Total                    158     -    0     4    -     0   162    -      0
                       ---------------------------------------------------

Notes to Schedules:
1. The table above analyses UK IFA channel sales by business unit and 
provides a summary of the M&G new business premiums for the two month period
from acquisition to 30 June.
2. The figures for overseas operations have been calculated using average 
exchange rates.  The applicable rate for Jackson National Life is 1.62 
(half year 1998 - 1.65).  After adjusting for the impact of foreign currency
movements, the Group's single premiums sales increased by 44%, and regular 
premium sales fell by 5%.
3. The 1998 figures exclude the results of the Australian and New Zealand 
operations that were sold later in that year.
4. The expected 1999 DSS Rebates have been recognised in full in quarter one,
whereas previously Retail IFA included DSS Rebates on a cash received basis.
The Retail IFA figure for 1998 has accordingly been restated, resulting in an
increase in single premiums from £2m to £33m.