1st Qtr New Business Results
Prudential PLC
18 April 2000
PRUDENTIAL PLC FIRST QUARTER 2000 NEW BUSINESS FIGURES
Total long term insurance and investment premiums up 54% to £3.9bn
Jackson National Life new insurance premiums up 79% to £1.5bn
Asia new insurance and investment premiums over five times 1999 levels at
£0.5bn
UK new insurance and investment premiums up 15% to £1.8bn
Egg card balances reach £464m
Prudential's group-wide operations achieved significant sales growth in the
first quarter of 2000 with total insurance and investment premiums of £3.9
billion, up 54% on 1999.
In the UK, new insurance and investment premiums were up 15% over 1999 to
£1.8 billion. This increase primarily reflects the continued growth of the
IFA channel, up 21% to £1.2 billion, including a £190 million contribution
from M&G.
In the United States, Jackson National Life continued its strong growth with
new insurance premiums up 79% on prior year at £1.5 billion. Within this
result, both variable annuity and fixed annuity sales were double prior year
at £484 million and £257 million respectively.
In Asia, new business premiums were more than five times 1999 levels.
Insurance sales have more than quadrupled to £97 million, while mutual fund
sales in India were more than five times prior year at £435 million.
UK banking operations continue to perform strongly, with £7.8 billion of
deposits and retail assets of over £2.5 billion, including Egg credit card
balances of £464 million. Egg now has in excess of 325,000 new egg card
accounts.
Prudential Group Chief Executive, Jonathan Bloomer, commented:
'Our first quarter new business figures represent another strong performance
across the whole of the group. In the US, annuity sales have doubled and in
Asia, sales have increased five-fold with particularly impressive mutual
fund sales in India.
In the UK, we continue to make good progress in implementing new business
models for our retail insurance businesses and in developing our IFA
operations. At Egg we continue to see high levels of customer demand and
have successfully launched our on-line investment supermarket. Our recent
announcements of strategic partnerships reflect the ongoing pace of Egg's
development.
These results clearly demonstrate the strength and breadth of our operations
around the world.'
Jackson National Life
Jackson National Life continued its impressive growth with single premium
insurance sales up 79% on prior year at £1.5 billion, reflecting strong
growth across all product lines. Annuity sales were £871 million, more than
double sales in the first quarter of 1999.
Variable annuity sales were particularly strong at £484 million, more than
double prior year, reflecting the ongoing success of Jackson's marketing
strategies, product development and the ongoing consumer demand for equity
orientated products.
Fixed annuity sales continue to benefit from recent US interest rate rises
and sales were almost double prior year at £257 million. Sales of stable
value products of £659 million, including £611 million of EMTN (European
Medium Term Notes) sourced funding agreements, were up 53% on 1999.
Prudential Asia
New insurance and investment sales were more than five times those of the
first quarter of 1999.
New insurance sales more than quadrupled to £97 million reflecting strong
sales of single premium products PruInvestor Bond and PruLink Investor Bond
in Singapore and the inclusion of sales from Taiwan and Vietnam, which
contributed 39% of Asia's new insurance regular premiums in the quarter.
Gross mutual fund sales in India were £435 million in the quarter, over five
times prior year. Redemptions in the quarter were £240 million, reflecting
the short-term nature of a number of liquid funds. During the quarter a new
technology fund was successfully launched, attracting £76m of gross funds.
Funds under management at the end of March 2000 totalled £609 million.
UK Operations
IFA Businesses
In the three months to 31 March 2000, new insurance and investment sales
through the IFA channel were up 21% to £1.2 billion, reflecting strong sales
of pooled pension funds and the inclusion of three months of M&G sales,
totalling £190m, offset by lower sales of annuities. Sales of our market
leading Prudence Bond totalled £428 million in the quarter. Excluding M&G
sales, IFA sales were in line with prior year.
M&G
M&G sales (IFA and Direct) in the quarter were £317 million, down 34% on the
same period last year. The previous year saw exceptional levels of
corporate bond fund sales, where M&G has established a particularly strong
reputation, whereas the current quarter saw highly concentrated fund flows
into a very small number of technology funds. Encouragingly, M&G's equity
fund sales are the highest for five years following improving equity fund
performance.
Prudential Retail
Total insurance and investment sales via Prudential Retail were down 15% on
the first quarter 1999 at £494 million. Over the same period sales force
numbers have fallen 36% to 1,829, demonstrating a significant improvement in
consultant productivity and important progress in implementing our new
business models.
Egg and Prudential Banking
In the first three months of 2000, Egg launched its on-line investment
supermarket, announced a significant credit card tie-up with Boots the
Chemist, acquired a stake in IFonline, and announced details of a
partnership with Cellnet.
Retail deposits for Egg and Prudential Banking now total £7.8 billion with a
seasonal net out-flow of funds for Egg in the first quarter of £228 million.
Egg opened almost 42,000 new deposit accounts during the quarter, with
internet only accounts representing 73% of this total.
On the asset side of the balance sheet, we continued to make significant
progress in quarter one. Our mortgage book now stands at £1.8 billion,
while credit cards balances have reached £464 million since its launch in
September 1999.
Following a limited launch to existing deposit account customers on 13
March, Egg's investment supermarket has attracted new funds of £14 million
to date.
Prudential Europe
Sales from our European operations were nearly three times prior year levels
at £14m. Sales of individual pensions in Germany were particularly strong at
£8m, more than double prior year.
Notes for Editors:
1. The sales from overseas operations have been calculated using average
exchange rates. The applicable rate of Jackson National Life is 1.61 (Q1
1999: 1.63).
2. On a weighted basis (regular premium sales plus 1/10th single premium
sales) group sales were £496 million 44% ahead of prior year.
3.
M&G First Quarter New Premiums
1998 1999 2000
£m £m £m
IFA Channel:
Regular 4,328 2,381 1,466
Single 101,428 325,447 188,258
Total 105,756 327,828 189,724
Direct:
Regular 5,250 1,226 2,996
Single 103,252 147,798 124,294
Total 108,502 149,024 127,290
Total IFA & Direct:
Regular 9,578 3,607 4,462
Single 204,680 473,245 312,552
Total 214,258 476,852 317,014
4. The interim results and proposed interim dividend for the half year to 30
June 2000 will be announced to the London Stock Exchange on 27 July 2000.
PRUDENTIAL PLC - 2000 NEW BUSINESS PREMIUMS - QUARTER 1
Single Regular Total
2000 1999 +/- 2000 1999 +/- 2000 1999 +/-
£m £m (%) £m £m (%) £m £m (%)
IFA Channel
Individual Pensions 57 41 39% 9 8 13% 66 49 35%
Corporate Pensions 211 113 87% 19 15 27% 230 128 80%
Life 470 478 (2%) 10 18 (44%) 480 496 (3%)
Annuities 155 235 (34%) - - - 155 235 (34%)
Investment Products 181 6 2,917% 2 - - 183 6 2,950%
Sub-Total 1,074 873 23% 40 41 (2%) 1,114 914 22%
DSS Rebates 51 50 2% - - 0% 51 50 2%
Total (schedule 2) 1,125 923 22% 40 41 (2%) 1,165 964 21%
Direct Channel (M&G):
Investment Products 124 - - 3 - - 127 - -
Total 124 - - 3 - - 127 - -
Prudential Retail
Individual Pensions 10 10 - 11 14 (21%) 21 24 (13%)
Corporate Pensions 1 3 (67%) 6 11 (45%) 7 14 (50%)
Life 145 208 (30%) 9 14 (36%) 154 222 (31%)
Annuities 123 132 (7%) - - - 123 132 (7%)
Investment Products 12 14 (14%) 2 1 100% 14 15 (7%)
Sub-Total 291 367 (21%) 28 40 (30%) 319 407 (22%)
DSS Rebates 175 175 - - - - 175 175 -
Total 466 542 (14%) 28 40 (30%) 494 582 (15%)
Total UK Operations
Individual Pensions 67 51 31% 20 22 (9%) 87 73 19%
Corporate Pensions 212 116 83% 25 26 (4%) 237 142 67%
Life 615 686 (10%) 19 32 (41%) 634 718 (12%)
Annuities 278 367 (24%) - - 0% 278 367 (24%)
Investment Products 317 20 1,485% 7 1 600% 324 21 1,443%
Sub-Total 1,489 1,240 20% 71 81 (12%) 1,560 1,321 18%
DSS Rebates 226 225 - - - - 226 225 -
Total UK Operations 1,715 1,465 17% 71 81 (12%) 1,786 1,546 16%
Jackson National Life
Fixed Annuities 257 129 99% - - - 257 129 99%
Equity Linked
Index Annuities 130 68 91% - - - 130 68 91%
Variable Annuities 484 226 114% - - - 484 226 114%
Guaranteed Investment
Contracts 48 431 (89%) - - - 48 431 (89%)
GIC - European Medium
Term Note 611 - - - - - 611 - -
Life - - - 6 6 - 6 6 -
Sub-Total 1,530 854 79% 6 6 0% 1,536 860 79%
Prudential Asia:
Insurance Products 61 9 578% 36 14 157% 97 23 322%
Investment Products 435 79 451% - - - 435 79 451%
Sub-Total 496 88 464% 36 14 157% 532 102 422%
Prudential Europe:
Individual Pensions 2 1 100% 6 2 200% 8 3 167%
Investment Products 4 1 300% 2 1 100% 6 2 200%
Sub-Total 6 2 200% 8 3 167% 14 5 180%
Group Total
Insurance Products 2,991 2,309 30% 112 102 10% 3,103 2,411 29%
Investment Products 756 100 656% 9 2 350% 765 102 650%
Group total 3,747 2,409 56% 121 104 16% 3,868 2,513 54%
2000 1999
£m £m
UK Banking Products
Egg Banking 7,337 4,327
Prudential Banking 491 810
Total Deposits FUM 7,828 5,137
Mortgage Book 1,824 828
Personal Loans Book 258 62
Credit Card Receivables 464 -
Sub-Total 2,546 890
US Banking Products
Deposits FUM 171 65
Retail Assets 165 49
General Insurance
UK Gross Premiums Written 79 79
Schedule
Single Regular Total
2000 1999 +/-(%) 2000 1999 +/-(%) 2000 1999 +/-(%)
£m £m £m £m £m £m
UK Operations
Retail IFA:
Individual
Pensions 44 41 7% 8 8 - 52 49 6%
Corporate
Pensions 35 26 35% 4 4 - 39 30 30%
Life 470 478 (2%) 10 18 (44%) 480 496 (3%)
Annuities 32 35 (9%) - - - 32 35 (9%)
Investment
Products 6 6 - 1 - - 7 6 (17%)
Sub-Total 587 586 - 23 30 (23%) 610 616 (1%)
DSS Rebates 51 50 2% - - - 51 50 2%
Total 638 636 (0%) 23 30 (23%) 661 666 (1%)
Prudential Group Pensions:
Corporate
Pensions 176 87 102% 15 11 36% 191 98 95%
Annuities 34 35 (3%) - - - 34 35 (3%)
Total 210 122 72% 15 11 36% 225 133 69%
Prudential Annuities:
Annuities 89 165 (46%) - - - 89 165 (46%)
M&G IFA:
Individual
Pensions 13 - - 1 - - 14 - -
Life - - - - - - - - -
Investment
Products 175 - - 1 - - 176 - -
Total 188 - - 2 - - 190 - -
Total IFA
Channel 1,125 923 22% 40 41 (2%) 1,165 964 21%
M&G Summary (IFA + Direct):
Individual
Pensions 13 - - 1 - - 14 - -
Life - - - - - - - - -
Investment
Products 299 - - 4 - - 303 - -
Total 312 - - 5 - - 317 - -
Notes to Schedules:
1. The table above analyses UK IFA channel sales by business unit.
2. The figures for overseas operations have been calculated using average
exchange rates. The applicable rate for Jackson National Life is 1.61
Quarter 1 - 1.63). After adjusting for the impact of foreign currency
movements, the Groups's single premiums sales increased by 54%, and
regular premium sales increased by 18%.
Enquiries: Carys Walshe Investor Relations. Tel. 020 7548 3823
Jeremy Reynolds Media Relations. Tel. 020 7548 3721
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