Prudential new business profit up 17 per cent

PRUDENTIAL boosted its new business profit 17 per cent to £1.5 billion in the first nine months of 2014, the insurer revealed Tuesday.

The group said its UK arm saw the biggest rise in new business profit – 28 per cent – as sales of so-called “bulk annuities”, where firms outsource all or part of their pension scheme liabilities, offset a 47 per cent slump in sales of individual annuities.

UK pension reforms introduced by Chancellor George Osborne in his last budget scrapped the requirement for retirees to use their pension pots to buy an annuity, a financial instrument that pays out an income for life, from an insurer upon retirement.

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Prudential, which employs about 2,200 at its site at Craigforth, near Stirling, said it completed six bulk annuity transactions in Britain in the year to date, accounting for new business profit of £88m.

The Pru said new business profit in Asia, one of its main markets, rose 15 per cent, while the United State was ahead 16 per cent.

Tidjane Thiam, group chief executive, said: “Our diversification by country, product and distribution channel is at the heart of our Asian strategy and has enabled continued growth despite short-term challenges in some of our key countries in the region.”