For several years insurer Prudential has been an unashamed Asia story. While drinks companies, for instance, have been buffeted by the marked slowdown in emerging markets, insurers, with Prudential in the vanguard, have been boosted by the region as an aspirational middle class snaps up insurance products.
Latest numbers out from the Pru show that its strong Asian exposure has served it well in allowing the group to largely ride out ultra-low interest rates in mature western insurance markets.
Half-year operating profits rose 9 per cent to £2.06 billion, ahead of City consensus expectations of £1.88bn, with double-digit profit growth in Asia the key driver. That compared with a much more modest 3 per cent rise in earnings in the UK.
Prudential has consistently said it values its UK business, and it is easy to see why. It provides ballast to group earnings and a hedge against downturns in far away economies.
But with each set of results it looks clearer that Asia is crucial for the company, and that is likely to continue given market volatility.
This was highlighted by profits at Prudential’s M&G Investments business falling 10 per cent in the latest trading period as jittery customers continued to withdraw money.
All in all, it is an impressively resilient performance. The twin pillars of the business remain wealthier younger Asian populations who are keen on savings and forward financial planning generally, and older client bases in the UK and US approaching retirement. The Pru has a useful foot in both demographic camps.
Time for reflection
It is only standard-issue diplomacy-speak at present, but China seems seriously displeased about the deferral of the Hinkley Point nuclear project by Prime Minister Theresa May. So be it.
The commercial arithmetic of the project has been seriously questioned by reputable sources, both the price the UK taxpayer will have to pay and the ability of French utility EDF, the lead constructor of the nuclear plant, to deliver on time and to budget.
The basic question also remains whether we should be handing over a key UK nuclear facility to China. A period of reflection is called for.