Prudential has boosted profits by a fifth and announced a £257 million special dividend for shareholders as the insurer shrugged aside global market volatility and the shake-up of the UK pensions sector.
The business recorded strong performances in 2015 across its UK, Asian and US divisions to report an operating profit of £4 billion, up from £3.2bn the previous year.
Prudential, which employs some 2,200 at its Craigforth site, near Stirling, was buoyed by a record performance from its UK retail business as demand for retirement products saw sales surge a third to £874 million.
This was despite Chancellor George Osborne’s reforms to the pension industry last April meaning retirees no longer have to buy an annuity.
UK life operating profit jumped 60 per cent to £1.2bn, while the Pru’s Asia life and asset management profit lifted 17 per cent to £1.3bn.
It said its American life assurance business Jackson was capitalising on the US “baby-boomer generation” now heading towards retirement, with operating profits rising 10 per cent to £1.6bn.
The Pru’s UK asset management arm, M&G, faced “a challenging year” amid increasing stock market volatility since last summer, with strong retail net outflows. M&G’s funds under management fell 7 per cent to £246bn, and its profits edged down 1 per cent to £442m.
Prudential chief executive Mike Wells, who took over from Tidjane Thiam last June, said he was pleased with the outcome for 2015 given the “macro-economic and political uncertainty, which have created a more unpredictable short-term outlook for global growth”.
He said the progress was also despite “the challenges presented by low long-term interest rates”.
The company, which has a stock market quote in Asia as well as London, has increased the total year dividend 5 per cent to 38.78p from 36.93p in 2014. It also announced a special dividend of 10p.
The Pru said Asia “remains at the heart of the group”, and its resilience was underpinned by demand from there.