Prudential's sales fall to build up capital

Published on Wednesday 28 October 2009 20:28

PRUDENTIAL announced a 9 per cent drop in worldwide sales yesterday after a weak domestic performance overshadowed the insurer's third-quarter results.

The figures – the first for new chief executive Tidjane Thiam – revealed a 22 per cent fall in UK revenues, to 157 million, as the firm concentrated on value over volume and building up its capital buffer. But the fall in sales to 700m on an annual premium equivalent basis was lower than feared, thanks to a marked recovery in Asia and a record result in the United States.

The Pru said it saw three-quarters of sales come from outside the UK for the first time in its history after a 66 per cent surge in revenues from the US, where it owns the Jackson National Life insurer, and a 4 per cent rise in Asia business.

It benefited from a "once-in-the-cycle event" as many US competitors withdrew from writing new business to preserve capital buffers.

The group said its capital surplus had increased further to 2.8 billion, having almost entirely withdrawn from wholesale – or bulk – sales.

This move, which saw wholesale sales plunge 99 per cent, also acted as a drag on worldwide figures.