Investment Rating - Maintains an "Overweight" rating with a target price adjustment to HKD 108.64, corresponding to 0.77x P/EV for 2023 [2] Core Views - The company achieved a turnaround in net profit for 2023, driven by improved investment returns, with a net profit of USD 1.701 billion [2] - The dividend payout for 2023 was 20.47 cents per share, a 9% year-on-year increase [2] - The New Business Value (NBV) grew by 43% (actual exchange rate) and 45% (fixed exchange rate), with Hong Kong contributing 267% growth, accounting for 45% of the group's NBV [2] - Mainland China's NBV declined by 40%, primarily due to product pricing adjustments and challenges in the bancassurance channel [2] - The company expects further growth in Hong Kong and a turnaround in Mainland China to drive NBV growth in 2024 [2] Financial Highlights - Revenue/Insurance service income for 2023 was USD 9.371 billion, a 9.6% increase year-on-year [3] - Gross profit for 2023 was USD 1.712 billion, compared to a loss of USD 997 million in 2022 [3] - Net profit for 2023 was USD 1.701 billion, a significant improvement from a loss of USD 1.007 billion in 2022 [3] - The PE ratio for 2023 was 16.18, and the PB ratio was 1.54 [3] Business Performance - Hong Kong's annualized new premiums increased by 276%, with the agency channel contributing 70% of the growth [2] - Mainland China's annualized new premiums decreased by 40% (actual exchange rate) and 36% (fixed exchange rate) [2] - The company added 4,000 new agents in Hong Kong in 2023, supporting future growth [2] - In Mainland China, the agency channel's annualized premiums grew by 25%, with per capita policies and NBV increasing by 11% and 26%, respectively [2] Asset Allocation - The company's total assets were USD 156.120 billion at the end of 2023, with debt securities accounting for 53.2% of the portfolio [7] - Equity securities and collective investment plans made up 41.5% of the asset allocation [7] Operational Metrics - The post-tax operating profit for 2023 was USD 2.438 billion, a 12.2% increase year-on-year [8] - The embedded value (EV) at the end of 2023 was USD 45.250 billion, a 7.3% increase from the previous year [10]

Investment Rating - The report maintains a "BUY" rating for Prudential Plc with a target price adjusted to HK$137.8, reflecting a potential upside of 81.9% from the current price of HK$75.75 [2][3]. Core Insights - Prudential reported a strong FY23 performance with new business profit (NBP) increasing by 45% year-over-year (YoY) to US$3.13 billion, surpassing consensus estimates by 6.4% [2]. - The NBP margin expanded by 3 percentage points to 53% for the full year, with a notable improvement in the second half of FY23, where the margin reached 57% [2]. - The board approved a full-year dividend of US$0.2 per share, indicating a 9% increase from FY22, and expects continued dividend per share (DPS) growth of 7%-9% in FY24 [2]. Summary by Sections Financial Performance - FY23 net profit was US$1.7 billion, a significant recovery from a loss of US$1.0 billion in FY22 [3]. - The adjusted operating profit for FY23 grew by 8% YoY to US$2.9 billion, driven by lower central costs and restructuring expenses [2][3]. - The Group's total assets increased to US$174.1 billion in FY23, with a projected growth to US$198.6 billion by FY24 [8]. Business Segments - Agency NBP surged by 75% YoY to US$2.1 billion, supported by a 37% growth in Health & Protections (H&P) and a 59% increase in agent productivity [2]. - The bancassurance segment saw a decline of 8% to US$793 million, primarily due to poor performance in China and Vietnam [2]. - The NBP of the China joint venture, CITIC Prudential Life, fell by 43% YoY to US$222 million, impacted by a 40% decline in APE sales [2]. Valuation Metrics - The stock is currently trading at a price-to-embedded value (P/EV) of 0.54x for FY24E, close to historical lows, reflecting concerns over China exposure and trading liquidity [2][3]. - The expected return on equity (ROE) is projected to improve from 9.8% in FY23 to 12.5% by FY26 [9]. - The dividend yield is anticipated to rise from 1.6% in FY23 to 2.7% by FY26 [9].

基金清盘在加速。 “目前很多基金规模低于5000万元，有的甚至只有一两百万元，出现了清算基金数量大幅增加的现象。”3月19日，前海开源基金首席经济学家杨德龙向记者表示。 据21世纪经济报道记者统计，截至3月19日，开年以来已有47只公募基金清盘（仅计算初始基金，下同）。同时，有近百只基金发出清盘相关提示公告。 此外，市场上还有超1000只基金的资产净值在5000万"警戒线"之下，清盘或即将清盘基金中甚至包括不少次新基金和发起式基金。 在“基金净值下跌”和“赎回增多”双重打击下，基金公司不得不面对大量基金缩水成“迷你基金”的现实，是清盘还是保壳，基金公司作出了各自不同选择。 清盘 3月19日，中信保诚养老2035三年持有基金进入清算程序。 很遗憾，该基金成立的3年正好赶上整体市场表现欠佳，带累该基金三年亏损16.21%，2023年四季度末该基金规模仅为5961万元。 清盘主要原因就是，作为一只发起式基金，中信保诚养老2035三年持有成立3年后基金资产净值低于2亿元，“触发合同终止条款”。 在今年，同类的基金清盘现象并不罕见。 记者据Wind数据统计，截至3月19日，开年以来已有47只基金清盘。 清盘基金甚至包括 ...

Financial Performance - New business profit increased by 45% to $3.125 billion, with a 47% increase when excluding interest and other economic changes[2]. - Adjusted operating profit rose by 8% to $2.893 billion[2]. - The group's adjusted IFRS operating profit for 2023 is $2.893 billion, an 8% increase from 2022, while the IFRS after-tax profit for 2023 is $1.712 billion, compared to a loss of $1.005 billion in 2022[16]. - The total dividend for 2023 is $0.2047 per share, a 9% increase from $0.1878 per share in 2022[16]. - The total embedded value as of December 31, 2023, was $45.3 billion, up from $42.2 billion as of December 31, 2022, equivalent to $16.43 per share[34]. - The group's European embedded value operating profit increased by 17% to $4.546 billion, primarily due to higher new business profits from insurance operations and increased profits from its asset management business[34]. - The total annual premium equivalent sales increased to $5.88 billion in 2023, a 34% increase from $4.39 billion in 2022[52]. - The operating profit from insurance business grew to $4.90 billion, driven by a 45% increase in new business profit to $3.13 billion, despite a 24% decrease in profit from existing business[52]. Business Strategy and Growth - The company has focused on enhancing customer experience and technology-driven distribution channels as part of its new strategy[2]. - The company aims for a compound annual growth rate of 15% to 20% in new business profit by 2027, compared to 2022 levels[13]. - The company has established a new purpose and strategy for the next five years, focusing on customer, distribution, and health strategy areas[12]. - The company aims to achieve a customer net promoter score in the top quartile across ten business units by 2027, with a target customer retention rate of 90%-95%[17]. - The company plans to enhance customer experience through personalized offerings and technology-driven solutions, aiming to improve customer retention and acquisition[18]. - The company is transforming its organizational model to enhance team skills and capabilities, prioritizing value creation when deploying capital across markets[30]. - The company is committed to product innovation to provide a wide range of personalized financial solutions, addressing wealth accumulation, protection, transfer, and retirement needs[29]. Market Performance - The company operates in 14 Asian life insurance markets, ranking in the top three in 10 of these markets[12]. - Hong Kong is a major growth driver, accounting for 45% of new business profit, with new business profit and annual premium equivalent sales increasing over threefold compared to last year[16]. - The company’s agent channel generated new business profit of $2.096 billion, reflecting a 75% increase, driven by a 67% growth in annual premium equivalent sales[15]. - The bank insurance new business profit decreased by 8% to $793 million, primarily due to challenging market conditions in mainland China and Vietnam[15]. - The annual premium equivalent sales from health and protection products through bank insurance partners grew by 26%, accounting for over 7% of total annual premium equivalent sales in 2023, up from 6% in 2022[21]. Investment and Capital Management - The company plans to invest approximately $1 billion in core capabilities, focusing on customer, distribution, health, and technology sectors[56]. - The estimated surplus of group regulatory capital over specified capital requirements was $19 billion, with a coverage ratio of 197%[62]. - The group plans to invest $1 billion in new business development, focusing on customer, distribution, health protection, and technology capabilities[36]. - The company aims to manage effective embedded value to ensure gradual conversion into free surplus, with expectations of over $9 billion being allocated to free surplus by the end of 2027[56]. - The group’s free surplus increased by 3% to $1.395 billion, with a year-end free surplus of $12.455 billion compared to $12.229 billion at the beginning of the year[58]. Risk Management - The group has established a governance framework to clarify risk responsibilities and align with risk policies and standards for risk identification, measurement, assessment, management, control, monitoring, and reporting[103]. - The group risk framework is overseen by the Board and includes a three-line model for risk management, with the first line managing risks, the second line providing independent oversight, and the third line conducting internal audits[104]. - The company has established an emerging risk identification framework to prepare for anticipated financial and non-financial risks, particularly in sustainability and climate-related areas[107]. - The group actively avoids intolerable risks and implements systems, processes, and controls to manage risks effectively[111]. - The liquidity risk management plan includes regular assessments of liquidity coverage ratios under both baseline and stressed scenarios[117]. Regulatory and Compliance - The company is monitoring regulatory developments across jurisdictions to ensure compliance and manage associated risks effectively[166]. - The Hong Kong Insurance Authority serves as the group's regulatory body, emphasizing a principle-based and outcome-oriented approach to supervision[162]. - The group has been designated as an internationally active insurance group by the Hong Kong Insurance Authority, requiring compliance with insurance capital standards[163]. - The International Financial Reporting Standard 17 (IFRS 17) came into effect on January 1, 2023, requiring fundamental changes in the accounting treatment, presentation, and disclosure of insurance contracts[167]. - The company faces operational risks that may negatively impact customer outcomes and its reputation, potentially leading to regulatory penalties and compliance risks[169]. Technology and Innovation - The company has established an advanced platform to store key operational data, enabling the deployment of advanced data analytics and AI, which reduced product inquiry time from over 4 minutes to under 30 seconds in a market test[26]. - The company is establishing an AI lab to foster innovation and attract external talent, aiming to integrate data analytics and AI into its organizational culture[26]. - The company is focused on enhancing its business in Malaysia through agent recruitment, increasing customer penetration with banking partners, and actively managing its medical investment portfolio[82]. - The company is enhancing its digital services and technology capabilities to create more convenient products for customers, which also introduces new regulatory and reputational risks[145]. - The company has implemented various defense measures, including AI-based endpoint security software and continuous security monitoring[125]. Challenges and Risks - The company faces significant non-financial risks due to its complex business activities and ongoing transformation efforts[123]. - The company is navigating a rapidly changing demographic landscape and intense competition, which affects its product sales and profitability[149]. - The financial services market is highly competitive, influenced by pricing, financial strength, regulatory compliance, and brand recognition, among other factors[149]. - The company faces challenges in attracting and retaining skilled employees, which could limit its growth potential and strategic implementation[149]. - The company may face increased compliance complexity and risks due to varying regulations across jurisdictions, affecting operational resilience[136].

Market Presence and Customer Base - Prudential operates in 14 Asian life insurance markets, ranking in the top three in 12 of them, and in 8 African markets, ranking in the top three in 4 of them[9] - Prudential has 18 million customers who trust the company for their financial and health solutions[9] - In China, the company has established a strong relationship with CITIC, enabling access to over 80% of GDP and operations in 100 cities[12] - The company operates in all 11 cities of the Greater Bay Area, covering a population of over 85 million[12] - In ASEAN, the company has over 40,000 active agents, accounting for 60% of the group's total active agents[12] - Prudential has over 70,000 active agents in Asia, with 7,000 qualifying for the Million Dollar Round Table (MDRT) membership[13] - Prudential has over 200 bank partners, including 10 strategic partners, and aims to increase bank insurance new business profit by 1.5 to 2 times by 2027[13] - Prudential Africa has established over 1,000 partnerships with banks, digital platforms, telecoms, and intermediaries[50] Financial Performance and Strategy - The company manages over $220 billion in assets through its internal investment capabilities[9] - Prudential aims to address the unmet needs of approximately 4 billion people in Asia and Africa[11] - The company plans to focus on enhancing customer experience, technology-driven distribution, and health business model transformation as part of its strategy[11] - Prudential's strategy includes organizational model changes to improve sales quality and economic value generation[11] - The company will invest in growth engines across Greater China, ASEAN markets, India, and Africa[11] - Prudential's financial model emphasizes compound growth driven by new business, with embedded value translating into free surplus for reinvestment and distribution[11] - The company has revised its purpose to "Protect every life, Build every future" to better align with its long-term goals and stakeholder value[10] - Prudential's new CEO, Anil Wadhwani, conducted a comprehensive strategic and operational review in his first six months, leading to the announcement of revised strategies and priorities[9] - The company's market size is expected to more than double, creating nearly $1 trillion in growth opportunities[12] - The company aims to achieve top-quartile Net Promoter Score (NPS) by 2027, with a current retention rate nearing 90%[12] - The company is focusing on personalized customer acquisition through data and technology to improve lead quality[12] - The company is building integrated solutions combining products with health, wellness, and financial services[12] - The company is leveraging a unified, scalable technology platform to create seamless end-to-end customer journeys[12] - The company is enhancing self-service capabilities through PruServices for handling queries, services, and claims[12] - The company aims to double the new business profit per agent and increase agent new business profit by 2.5 to 3 times by 2027[13] - The company plans to increase the penetration rate of its two main strategic bank partners from 8% in 2022 to 9-11% by 2027[13] - Prudential's health insurance business generated over $2 billion in gross written premiums in 2022[13] - The company aims to double its health insurance new business profit from 2022 to 2027 and achieve a top-quartile Net Promoter Score (NPS) by 2027[13] - Prudential manages over $220 billion in assets across 11 markets through its investment arm, Eastspring Investments[15] - The company targets a 55% reduction in weighted average carbon intensity by 2030 as part of its responsible asset ownership strategy[15] - The company's new business strategy aims to achieve a threefold return on capital invested, with an internal rate of return exceeding 25% and a payback period of less than four years[16] - Over the past decade, new business has driven a $27 billion increase in the group's embedded value, with European embedded value nearly doubling[16] - The company plans to invest $1 billion in core capabilities, focusing on customer, distribution, health, and technology sectors[16] - The company targets a 15% to 20% compound annual growth rate (CAGR) in new business profits over the next five years (2022-2027)[16] - The company aims for a double-digit CAGR in operating free surplus from in-force insurance and asset management businesses over the next five years (2022-2027)[16] - New business profits increased by 39% in the first half of 2023, with 16 life insurance markets recording double-digit growth, led by Hong Kong[19] - The agency channel generated $1.002 billion in new business profits, a 74% increase, driven by a 96% rise in annual premium equivalent sales to $1.507 billion[19] - The company's assets under management increased by 3% to $227.7 billion as of June 30, 2023, reflecting inflows from external clients and favorable market movements[20] - The company's adjusted IFRS operating profit for the first half of 2023 was $1.462 billion, a 6% increase year-over-year, driven by a 14% rise in asset management business[20] - The company's IFRS post-tax profit for the first half of 2023 was $947 million, compared to a loss of $1.511 billion in the same period last year[20] - Annual Premium Equivalent (APE) sales for CITIC-Prudential Life in mainland China decreased by 17% to $394 million in H1 2023, primarily due to a decline in bancassurance sales, partially offset by double-digit growth in agency sales and higher health and protection APE sales[23] - New business profit for CITIC-Prudential Life in mainland China declined by 16% to $171 million in H1 2023, impacted by lower sales and unfavorable economic factors, though the new business margin remained stable at 43%[23] - Agency APE sales for CITIC-Prudential Life in mainland China grew by 25% in H1 2023, with active agent productivity increasing by over 50%, and over 800 agents achieving Million Dollar Round Table (MDRT) qualification[25] - CITIC-Prudential Life expanded its retirement planning health benefit network to cover 22 institutions across 7 cities in mainland China, with sales of lifetime protection products doubling year-over-year[24] - Hong Kong APE sales surged over fourfold to $1.027 billion in H1 2023, driven by cross-border traffic recovery and strong local growth of 68%, with new customers accounting for 54% of APE sales[26] - New business profit in Hong Kong more than tripled to $670 million in H1 2023, supported by higher APE sales and favorable channel mix, though the new business margin declined by 28 percentage points to 65%[26] - Prudential Hong Kong's agency APE sales grew over sixfold in H1 2023, accounting for over 72% of total APE sales, with active agents increasing by 75% and agent productivity rising 2.8x[30] - Prudential Hong Kong launched a new comprehensive multi-critical illness product in H1 2023 and expanded its presence in the Greater Bay Area by opening a Macau branch[29] - Indonesia APE sales increased by 36% to $150 million in H1 2023, with new business profit rising 17% to $61 million, though the new business margin declined by 6 percentage points to 41%[31] - Prudential Indonesia upgraded its flagship medical insurance rider in H1 2023, introducing popular telemedicine benefits and traditional medicine treatments[32] - Agency channel annual premium equivalent (APE) sales increased by 51% in 2022, driven by improved sales management models and enhanced training programs[33] - Bancassurance channel APE sales grew by 15% in H1 2023, with new business profit increasing by 14% due to higher sales from Privilege Banking clients[33] - Indonesia's APE sales surged by 42% to $150 million in H1 2023, supported by double-digit growth in both agency and bancassurance channels[33] - Malaysia's APE sales rose by 12% to $185 million in H1 2023, with new business profit increasing by 11%[35] - Singapore's APE sales declined by 3% to $386 million in H1 2023, impacted by challenging interest rate conditions, though health and protection APE sales grew by 11%[38] - New business profit in Singapore dropped by 20% to $198 million in H1 2023, reflecting lower sales of lump-sum premium products and adverse economic factors[38] - The company launched a new Islamic health and protection product (PruBSN Damai) and a Shariah-compliant ESG fund (Takafulink Dana ESG Global) to cater to evolving customer needs[36] - A new investment-linked savings product (PruElite Plus) was introduced for affluent clients, and a prenatal care plan (PruMY Child Plus) was launched for young families[36] - The bancassurance channel in Malaysia saw strong growth, with over 90,000 credit card customers transitioning to a new credit card repayment protection plan[37] - The company expanded its corporate benefits business, covering 3,000 SMEs and over 200,000 employees, with APE sales increasing by 17% in H1 2023[39] - Annual Premium Equivalent (APE) sales increased by 10% to $885 million in the first half of 2023 compared to the same period in 2022[40] - New business profit rose by 4% to $316 million in the first half of 2023, with a new business margin of 36%[40] - Bank insurance APE sales declined by 10% in the first half of 2023 due to reduced lump-sum premium dividend business[41] - Regular premium products APE sales grew by 49% in the first half of 2023, accounting for over 86% of total APE sales[41] - Over 75% of policies are processed through instant underwriting systems, improving efficiency and reducing processing time[42] - Agency channel APE sales grew by 2% in the first half of 2023, with a 7% increase in the second quarter compared to the first quarter[43] - India's APE sales increased by 15% in the first half of 2023, driven by a highly diversified distribution network[44] - Thailand's APE sales grew by 20% in the first half of 2023, supported by strong bank insurance and employee benefit contributions[45] - Vietnam's APE sales decreased by 18% in the first half of 2023, outperforming the overall market decline of 31%[46] - Philippines' APE sales increased by 13% in the first half of 2023, driven by growth in the agency channel[48] - Africa's annual premium equivalent sales increased by 31% in the first half of 2023, with all eight markets achieving double-digit growth[50] - The number of active agents in Africa grew by 18% compared to the same period last year[50] - Total assets under management or advisory by Eastspring reached $227.7 billion, a 3% increase from the previous year[51] - Net inflows from third parties (excluding money market funds and funds managed for M&G plc) were $1.9 billion in the first half of 2023[51] - The life insurance business recorded net inflows of $1.4 billion, offset by net outflows of $7.1 billion from funds managed for M&G plc[51] - 59% of managed funds outperformed their benchmarks on a three-year basis, up from 41% in June 2022[51] - The adjusted operating profit was $146 million, with a fee margin of 31 basis points, an increase of 3 basis points from the previous year[51] - The cost/income ratio improved to 53%, down from 55% in the same period last year[51] - Eastspring operates in 11 Asian markets and has distribution offices in North America and Europe, with a team of 300 investment professionals[51] - Group IFRS adjusted operating profit increased by 6% to $1.462 billion in the first half of 2023, driven by reduced central costs and increased profit from asset management business Eastspring[56] - Group IFRS post-tax profit totaled $947 million, a significant improvement from a loss of $1.511 billion in the first half of 2022, mainly due to smaller interest rate declines in 2023 compared to 2022[56] - Adjusted shareholders' equity increased to $36.4 billion as of June 30, 2023, up from $35.2 billion at the end of 2022, driven by a 3% increase in IFRS shareholders' equity and a 4% increase in contract service margin[56] - The company's leverage ratio remained near the lower end of its target range at 20% as of June 30, 2023[56] - Shareholder surplus above the group's prescribed capital requirement was estimated at $15.5 billion as of June 30, 2023, with a coverage ratio of 295%[56] - The company plans to invest approximately $1 billion in enhancing core capabilities across customer, distribution, and health strategic pillars between 2023 and 2025[56] - The board approved an interim dividend of 6.26 cents per share, compared to 5.74 cents per share in 2022[56] - The company expects annual dividend growth of 7% to 9% in 2023 and 2024[56] - New business profit increased by 39% to $1.489 billion, driven by a 42% increase in annual premium equivalent sales[57] - Group European Embedded Value operating profit grew by 22% to $2.155 billion, with a return on embedded value of 10%[57] - Embedded value as of June 30, 2023, was $43.7 billion, up from $42.2 billion at the end of 2022[57] - Operating free surplus generated from insurance and asset management businesses decreased by 2% to $1.438 billion[57] - New business investment increased to $414 million, reducing the total operating free surplus from life insurance and asset management businesses to $1.024 billion[57] - The company implemented IFRS 17 for insurance contracts, resulting in an $1.8 billion increase in group shareholders' equity at the transition date[57] - Adjusted operating profit for 2022 decreased by $653 million to $2.722 billion under IFRS 17[57] - The S&P 500 index rose by 16%, while the MSCI Asia ex-Japan index increased by 2% and the Hang Seng Index fell by 4%[57] - The US 10-year yield decreased by 8 basis points to 3.81%[57] - Adjusted operating profit per share increased by 11% to 45.2 cents[60] - Adjusted operating profit for the Group under IFRS was $1.462 billion, an increase of 6%, driven by a 14% increase in profit from the asset management business, Eastspring, and lower central costs[61] - Adjusted operating profit for China's CITIC-Prudential Life increased by 32% to $164 million, driven by growth in savings product sales and improved claims experience[61] - Adjusted operating profit in Hong Kong decreased by 7% to $554 million, due to lower net investment returns and reduced favorable claims experience following the lifting of COVID-19 restrictions[61] - Adjusted operating profit in Indonesia decreased by 4% to $109 million, reflecting adverse morbidity experience related to medical reimbursement products post-COVID-19 restrictions[62] - Adjusted operating profit in Malaysia decreased by 10% to $165 million, mainly due to normalization of claims experience as medical cases returned to pre-pandemic levels[62] - Adjusted operating profit in Singapore decreased by 16% to $270 million, reflecting the impact of adverse market movements in 2022 on contract service margin (CSM) and investment balances[63] - Adjusted operating profit for growth markets and other segments increased by 16% to $374 million, supported by higher CSM release due to new business growth and product mix changes[63] - CSM release under IFRS 17 was $1.178 billion in H1 2023, with an annualized release rate of approximately 11%, consistent with the rate in 2022[63] - Risk adjustment release was $107 million, reflecting non-market risks expiring during the period, with a stable proportion relative to the opening balance[63] - Net investment performance was $612 million, down from $632 million in H1 2022, primarily due to the impact of lower asset values at the beginning of 2023 following adverse market movements in 2022[64] - Contractual Service Margin (CSM) increased by $1.956 billion in the first half of 2023, driven by $1.196 billion from profitable new business and $760 million from CSM releases[66] - The CSM balance at the end of the period was $20.82 billion, reflecting an annualized growth rate of 8%[66] - External funds under management increased to $88.7 billion, up 9% year-over-year[67] - Total funds under management and advisory reached $227.7 billion, a 2% increase from the previous year[67] - Third-party net inflows (excluding money market funds and M&G plc managed funds) were $1.9 billion in H1 2023, compared to a net outflow of $1.8 billion in the same period last year[68] - Adjusted operating profit for Eastspring increased by 14% to $146 million in H1 2023[68] - The fee margin based on operating income improved by 31 basis points to 31 basis points in H1 2023[68] - The cost/income ratio improved by 2 percentage points to 53% in H1 2023[67] - Central costs (excluding restructuring and IFRS 17 implementation costs) decreased by 11% in the first half of 2023, reflecting targeted reductions in headquarters costs and benefits from the redemption of a senior debt instrument in January 2023[69] - Core structural borrowing interest payable decreased by $18 million in the first half of 2023 compared to the previous period[69] - Restructuring costs were $92 million in the first half of 2023, down from $152 million in the same period in 2022, primarily due to the ongoing IFRS 17 project and one-time costs related to business regulation[69] - The effective tax rate on adjusted operating profit was 15% in the first half

Financial Performance - New business profit increased by 39% to $1.489 billion, with 17 life insurance markets showing growth, 16 of which recorded double-digit growth[3]. - Annualized premium equivalent sales rose by 42% to $3.027 billion[3]. - Adjusted operating profit increased by 6% to $1.462 billion[3]. - Operating profit rose by 14% to $146 million[8]. - Overall, new business profit slightly declined by 3% on a non-economic basis, while profit margins improved by 7 percentage points[7]. - The adjusted IFRS operating profit for the period was $947 million, compared to a loss of $1.505 billion in 2022, indicating a significant recovery[9]. - The total income from insurance operations was $1.636 billion, a decrease of 3% compared to the previous period[74]. - The company reported a net profit of $0.947 billion for the first half of 2023, a significant improvement from a net loss of $1.511 billion in the same period of 2022[72]. - The total comprehensive income for the first half of 2023 was $756 million, a significant improvement from a loss of $2,291 million in the same period of 2022[166]. - The company reported a total comprehensive loss of $(1,797) million for the year ended December 31, 2022, which included a loss of $(1,007) million attributable to shareholders[169]. Dividend and Shareholder Returns - First interim dividend per share increased by 9% to 6.26 cents, with guidance for annual growth of 7% to 9% for 2023 and 2024[3]. - The board approved a dividend of $0.0626 per share, up from $0.0574 per share in the previous year, with expected annual growth of 7% to 9% for 2023 and 2024[73]. - The company declared an interim dividend of 6.26 cents per share, up from 5.74 cents in the first half of 2022, reflecting a 9.1% increase[165]. - The company paid dividends to shareholders amounting to $361 million in the first half of 2023, compared to $320 million in the same period of 2022, an increase of 12.8%[171]. Market Performance and Growth - The company operates in 14 Asian life insurance markets and 8 African life insurance markets, showcasing its extensive market presence[9]. - Prudential's footprint spans Asia and Africa, with an estimated annual gross premium growth of nearly $1 trillion from 2022 to 2033[16]. - The local division in Hong Kong and the mainland China traveler segment saw significant performance, with local annual premium equivalent sales increasing by 68%[7]. - In mainland China, the company proactively withdrew certain guaranteed savings products, leading to a 25% increase in annual premium equivalent sales from agents and a 53% increase in capacity[7]. - The company aims for a compound annual growth rate of new business profit of 15% to 20% from 2022 to 2027[4]. - The company aims for a compound annual growth rate (CAGR) of 15% to 20% in new business profit from 2022 levels by 2027, targeting new business profit of $44 to $54 billion[34]. Customer Experience and Product Development - The company plans to enhance customer experience and focus on technology-driven distribution to drive growth[4]. - Prudential plans to enhance customer experience to acquire more customers and increase loyalty, thereby creating lifetime value[19]. - The company launched a new comprehensive multi-critical illness product in H1 2023 to meet diverse customer needs[46]. - The company is focusing on transforming its health business model to become a trusted partner in health care, aiming to double new business profit from health insurance between 2022 and 2027[29]. - The company aims to achieve a customer retention rate close to 90% and increase the lifetime wallet share of existing customers[24]. Regulatory and Compliance - The group’s capital management framework adheres to the capital requirements set by the Hong Kong Insurance Authority, ensuring compliance with regulatory standards[100]. - The company is committed to regularly assessing the suitability and affordability of its products, aiming to reduce complexity while enhancing transparency in costs and benefits[116]. - Regulatory compliance complexity continues to increase, particularly in light of geopolitical tensions and evolving regulations across multiple jurisdictions[118]. - The company is actively monitoring market developments and engaging with policymakers and regulatory bodies to address compliance with existing and new regulations[119]. Risk Management - The group is focused on creating long-term value for stakeholders, particularly in high-growth markets in Asia and Africa[129]. - The group faces market risks from fluctuations in stock prices, interest rates, credit spreads, exchange rates, and property prices, with a moderate inflation risk primarily from rising medical costs[132]. - The group actively manages market risk through policies, risk appetite statements, and the use of derivatives for hedging[132]. - The group has established a risk governance framework led by the Group Risk Committee, which oversees risk policies and communication across major business units[121]. - The group is committed to responsible management of environmental, social, and governance (ESG) issues, with a focus on enhancing customer access to health and financial security[140]. Investment and Asset Management - Prudential manages over $220 billion in assets, reflecting strong internal investment capabilities[6]. - The total assets under management increased by 3% to $227.7 billion as of June 30, 2023, reflecting inflows from external clients and favorable market changes[36]. - The company has invested over $220 billion in assets across 11 markets, focusing on enhancing its investment capabilities[32]. - The company plans to invest approximately $1 billion in core capabilities, particularly in customer, distribution, health, and technology sectors[33]. Economic and Market Conditions - The ongoing high inflation and interest rates, along with economic uncertainty, have increased strategic and business risks for the group[111]. - The tightening of monetary conditions and rising debt servicing costs may lead to a slowdown in economic growth and increased risk of recession globally[114]. - The group anticipates that macroeconomic conditions will remain challenging, potentially affecting new business growth and investment performance[114]. - Global inflation has decreased since mid-2022, but core inflation remains above central bank targets, particularly in the US and UK, driven by strong service demand and a tight labor market[113]. Transformation and Technology - The company is facing significant transformation risks due to the implementation of major change plans, which include enhancing digital capabilities and operational efficiency[143]. - The company has established a transformation risk framework to ensure robust governance and risk management during its strategic initiatives[143]. - The company is transforming its technology platform to an open structure to quickly adopt market innovations and enhance customer interaction through generative AI[30]. - The company has invested in advanced analytics technology and AI tools to strengthen its financial crime risk management capabilities[145].

Market Focus and Strategy - Prudential plc focuses on Asia and Africa markets with significant savings and protection gaps, driving demand for its products[4] - Prudential plc completed restructuring in 2021 to fully focus on Asia and Africa markets[15] - Prudential's strategy focuses on addressing health, protection, and savings gaps in selected Asian and African markets[18] - Prudential operates in markets with low insurance penetration and significant pension gaps[37] - Prudential focuses on growth opportunities in Mainland China, India, and Southeast Asia[47] - Prudential aims to make health and protection more accessible and affordable, and to promote financial inclusion[47] - Prudential is accelerating the development of digital distribution models and enhancing its digital insurance product portfolio[48] - Prudential aims to achieve long-term double-digit growth in embedded value per share[32] - Prudential aims to deepen its wealth management market share by offering comprehensive financial solutions to high-net-worth and affluent clients[81] Financial Performance - Prudential's adjusted operating profit increased by 8% in 2022[18] - The company declared a total cash dividend of 18.78 cents per share for 2022, a 9% increase from 2021[18] - Prudential's new business profit in 2022 was impacted by COVID-19 and economic challenges[18] - Prudential's adjusted operating profit for 2022 was $1.007 billion, compared to $2.214 billion in 2021[26] - Prudential's operating free surplus increased from $1.564 billion in 2018 to $2.193 billion in 2022[53] - European embedded value rose from $27.4 billion in 2018 to $42.2 billion in 2022[53] - European embedded value reached $42.2 billion in 2022[60] - New business profit amounted to $2.2 billion in 2022[60] - Annual Premium Equivalent (APE) sales increased by 9% to $4.393 billion at constant exchange rates[70] - New business profit decreased by 11% to $1.8 billion, with a 5% increase outside Hong Kong[70] - Adjusted IFRS operating profit based on long-term investment returns rose by 8% to $3.375 billion[70] - IFRS post-tax profit for 2022 was $1.007 billion, impacted by rising interest rates and stock market declines[70] - Health and protection products contributed 43% of new business profit[70] - Over 30% of new customers came from affluent and high-net-worth segments[70] - More than 50% of policies were health protection plans[70] - The company's operating free surplus generated from insurance and asset management businesses (excluding restructuring costs) was $2.193 billion, an increase of 9%[198] - The total free surplus generated by the Group increased by 21% to $1.374 billion[198] - The free surplus as of December 31, 2022, was $12.229 billion, and excluding distribution rights and other intangible assets, it was $8.39 billion[198] - The cost of investing in new business increased by 10%, in line with the 9% increase in annual premium equivalent sales[198] - The Group's 2022 cash dividend totaled 18.78 cents per share, a 9% increase from 2021[199] - The Board approved a second interim cash dividend for 2022 of 13.04 cents per share, compared to 11.86 cents per share in 2021[199] Digital Transformation and Innovation - Prudential plc launched the AI-driven health app Pulse by Prudential in Asia in 2019[15] - The company continued its digital technology investments to enhance customer experience and distribution efficiency in 2022[18] - Pulse platform is live in 19 markets[43] - Prudential is accelerating the development of digital distribution models and enhancing its digital insurance product portfolio[48] - 79% of new policies in 2022 were automatically underwritten, with 41% issued without human intervention[71] - 64% of claims were submitted electronically, and 31% of all claims were instantly approved through automated adjudication[71] - Pulse platform supports agents and customers across 19 majority-owned markets in Asia and Africa, enhancing digital transformation and reducing IT investments[75] - PRUForce, a digital agent tool on Pulse, is operational in six markets, improving agent efficiency and personalized customer interactions[75] - PRUServices, a digital customer service platform, is live in nine markets, enabling policy management and reducing policy value loss[76] - Prudential partnered with Google Cloud in October 2022 to enhance health and financial protection services using AI and advanced analytics[76] - The company's digital channel achieved a threefold increase in annual premium equivalent sales in 2022 compared to 2021, ranking second in digital market share[129] - Enhanced distribution capabilities through new digital investment and service platforms in Malaysia and Thailand[137] Leadership and Governance - Prudential plc celebrated its 175th anniversary and 100 years of operations in Asia in 2022[13] - The company appointed Anil Wadhwani as CEO in February 2023, bringing over 30 years of experience in Asian financial services[21] - Prudential's board transformed to focus exclusively on Asia and Africa operations in 2022[22] - Two new board members, Arijit Basu and Claudia Suessmuth Dyckerhoff, joined in 2022 and 2023 respectively, bringing expertise in insurance, health, and technology[22] - Prudential celebrated its 100th anniversary of operations in Asia and 175th overall in 2023[18] Sustainability and Responsible Investment - Prudential's investment arm, Eastspring, signed the UN-supported Principles for Responsible Investment in 2022[16] - The company aims to achieve net-zero emissions for assets held by its insurance companies by 2050[53] - Carbon emissions (weighted average carbon intensity) decreased from 386 in 2019 to 219 in 2022[53] - The company aims to reduce weighted average carbon intensity by 25% by 2025[67] - Increased focus on responsible investment, including communication with high-emission companies accounting for 65% of Prudential's asset portfolio's absolute carbon emissions[138] - Launched Japan Sustainable Value Fund and Reksa Dana Indeks ESG IDX Leaders Plus in Indonesia[138] - The weighted average carbon intensity of the investment portfolio has decreased by 43% compared to the 2019 baseline, driven by coal policy and carbon intensity budgeting[148] - The company aims to reduce carbon emissions in shareholder and policyholder asset portfolios by 25% by 2025[147] Regional Performance - Prudential's largest businesses are located in Mainland China, Singapore, Hong Kong, Malaysia, and Indonesia[37] - 50% of Prudential's annual premium equivalent sales and new business profit come from Southeast Asia[29] - Asia's health and protection gap is estimated at $1.8 trillion[30] - Asia contributes 40% to global GDP growth[30] - The middle class in Asia is expected to grow by 1.5 billion people from 2020 to 2030[31] - Prudential's health and protection gap in China is estimated at $805 billion[86] - Prudential's new business profit in China has more than doubled from 2017 to 2022[86] - Prudential's annual premium equivalent sales in China increased by 19% to $884 million in 2022[86] - New business profit in China grew by 15% in 2022 compared to 2021[87] - The bancassurance channel in China saw a 32% growth in annual premium equivalent sales in 2022[87] - Prudential's new business profit margin in China slightly decreased to 44% in 2022 from 45% in 2021[87] - The agency channel in China experienced a 6% increase in annual premium equivalent sales in the second half of 2022[87] - Prudential's adjusted operating profit in China increased by 12% in 2022 compared to 2021[86] - The company's digital sales in China accounted for over 80% of total sales, the highest among its businesses[90] - CITIC-Prudential Life has over 15,200 agents, with a 9% increase in annual premium equivalent sales per active agent[91] - CITIC-Prudential Life added 11 new bank insurance partners, expanding its network to 59 partners covering over 6,600 branches in mainland China[91] - The bank insurance channel's new business profit increased by 45% due to an efficient service model[91] - Prudential's annual premium equivalent sales in Hong Kong decreased by 4% to $522 million in 2022[95] - Prudential's new business profit in Hong Kong decreased by 47% to $384 million in 2022[98] - Prudential's market share in Hong Kong increased to 7.4% in 2022, up 2.0 percentage points from 2021[95] - Prudential's market share in Hong Kong reached 12.5% in Q4 2022, an increase of over 5 percentage points from Q4 2021[95] - Prudential's adjusted operating profit in Hong Kong increased by 6% to $1,036 million in 2022[92] - Prudential's customer retention rate in Hong Kong exceeds 97%[99] - Prudential obtained a license to open a branch in Macau in January 2023, aiming to capture opportunities in the Greater Bay Area[94] - The company's agency team accounted for over 58% of the Annual Premium Equivalent (APE) sales[101] - Agency channel APE sales increased by 57% in the second half of 2022 compared to the first half[101] - Average premium per policy in the agency channel increased by 17% year-on-year[101] - Agency recruitment in the second half of 2022 rebounded by 45% compared to the first half[101] - In Indonesia, the company's APE sales reached $247 million, with a new business profit of $125 million and a new business margin of 51%[102] - The company holds an 11% market share in the Indonesian life insurance market based on weighted new business premiums[103] - The company's agency channel in Indonesia holds a 28% market share, and it leads the Islamic market with a 32% market share[103] - Overall APE sales in 2022 grew by 2% to $247 million, with a 30% increase in the second half compared to the first half[104] - The company's new business profit increased by 4% in 2022, with a slight improvement in the profit margin to 51%[104] - The company's agency team in 2022 had 980 agents qualified for the Million Dollar Round Table (MDRT) membership[108] - Annual Premium Equivalent (APE) sales decreased by 17% to $434 million, with a slight decline of 2% excluding the impact of 2021 repricing[110] - New business profit decreased by 27% to $219 million, reflecting lower sales and profit margins[110] - Adjusted operating profit increased by 10% to $364 million, while IFRS post-tax profit rose by 1% to $252 million[109] - The company holds an 18.9% market share in Malaysia's life insurance sector and a 22.3% share in the Islamic insurance market[109] - The company's customer base reached 3 million in 2022, evenly split between traditional and Islamic insurance businesses[111] - The agency team grew by 8% to over 24,300 agents, with a recruitment of 7,400 new agents in 2022[113] - In Singapore, APE sales grew by 6% to $770 million, with a 3% increase in agency APE sales[115] - New business profit in Singapore decreased by 2% to $510 million, impacted by lower profit margins[116] - The company issued over 396,000 BSN Takaful Sakinah health and protection certificates through its partnership with BSN[111] - The company aims to double the number of Malaysians with Islamic insurance policies by 2026, supported by government incentives[109] - High net worth market annual premium equivalent sales increased by 30%[117] - Corporate benefits business annual premium equivalent sales grew by 17%, covering over 3,000 SMEs and 200,000 employees[117] - Customer retention rate reached 96%[117] - Number of top agents qualifying for the Million Dollar Round Table increased by over 23% to more than 1,200[118] - Annual premium equivalent sales in growth markets increased by 14% to $1.611 billion[119] - New business profit in growth markets rose by 13% to $630 million[119] - Adjusted operating profit in growth markets grew by 13% to $1.057 billion[119] - Vietnam market share increased by 2 percentage points to 15%[120] - Philippines market share reached 17%, leading the market[120] - Taiwan annual premium equivalent market share increased by 1.5 percentage points to 4.4%[120] - ICICI Prudential's annual premium equivalent sales in India increased by 4%, with annuity sales up 56% and protection sales up 23%[123] - Thailand's annual premium equivalent sales grew by 18%, driven by bancassurance sales and easing COVID-19 restrictions[123] - Philippines' annual premium equivalent sales rose by 14% to $182 million, despite interest rate fluctuations impacting new business profit[123] - Vietnam's annual premium equivalent sales surged by 26%, outperforming the industry's 8% growth[123] - Taiwan's annual premium equivalent sales increased by 35%, driven by strong bancassurance and brokerage channel growth[123] - Africa's annual premium equivalent sales grew by 19%, with new business profit margins remaining stable[123] - ICICI Prudential launched new products including a regular premium annuity plan and a long-term savings product with tax-free guaranteed income[124] - Thailand's health and protection annual premium equivalent sales mix increased from 16% in 2019 to 24% in 2022[125] - Vietnam introduced affordable protection solutions, selling over 2,100 SOFI and 31,100 PRU-Easy365 policies[125] - ICICI Prudential recruited over 34,700 new agents, bringing the total number of agents to over 204,000[126] - TTB has approximately 600 branches and UOB has around 150 branches in Thailand, providing opportunities for expanding bancassurance and customer base[129] - The company's digital channel achieved a threefold increase in annual premium equivalent sales in 2022 compared to 2021, ranking second in digital market share[129] - The number of Million Dollar Round Table (MDRT) qualifiers in Vietnam increased by 60% to nearly 2,000 in 2022[129] - Eastspring's assets under management or advice decreased by 14% to $221.4 billion in 2022, primarily due to market depreciation and foreign exchange translation losses[130] - Eastspring's adjusted operating profit declined by 17% to $260 million in 2022[130] - The company's bancassurance channel in Vietnam recorded strong growth of 26% in 2022[129] - Eastspring's cost/income ratio increased by 1 percentage point to 55% in 2022[130] - The company's corporate benefits business grew by 49% in 2022 compared to 2021[129] - Eastspring's fee margin based on operating income decreased by 1 basis point to 29 basis points in 2022[130] - The company's agency channel in the Philippines saw an 89% increase in recruitment in 2022[131] - Established Eastspring Thailand as the sixth-largest fund management company in Thailand[137] - Over 50% of new clients contracted directly or through partnerships with fintech companies and neobanks[139] - Expanded existing customer base to approximately 8 million[139] - Strengthened relationships with Prudential Group's life insurance business and corporate asset owners[136] - Successfully secured mandates and additional investments from some of the largest pension and sovereign wealth funds in the Americas, Europe, Taiwan, and Malaysia's Islamic business[136] - Broadened product portfolio of equity and fixed income strategies through IPAMC[139] - Deepened cooperation with over 40 local research institutions through CITIC-Prudential Fund Management Co., Ltd.[139] Corporate Social Responsibility - Prudential plc established a non-profit organization, Prudence Foundation, in Hong Kong in 2018[15] - Community investment cash contributions totaled $12.2 million[60] - The company paid over $9.3 billion to clients for long-term insurance products in the past year[58] Investment and Asset Management - Prudential's Asian asset management company, Eastspring, manages or advises assets worth $221.4 billion[29] - Eastspring Investments manages or advises assets worth $221.4 billion, ranking in the top ten asset management companies in six of its eleven markets[77] - Eastspring's average managed or advised funds decreased by 5% to $229.4 billion in 2022, reflecting adverse market conditions partially offset by net inflows[77] - External managed funds totaled $91.2 billion, with a decrease of 14% compared to the previous year[175] - Internal managed or advised funds totaled $130.2 billion, with a decrease of 15% compared to the previous year[175] - Total managed or advised funds amounted to $221.4 billion, with a decrease of 14% compared to the previous year[175] - Adjusted operating profit for the asset management business was $260 million, a decrease of 13% compared to the previous year[175] - The company's investment portfolio excludes assets held by joint ventures and unit-linked funds due to lack of full control over investment strategies[142] - Insurance and asset management businesses generated free surplus of $2.193 billion, a 9% increase at constant exchange rates and 6% at actual exchange rates[150] - Group operating free surplus net of restructuring and central costs was $1.374 billion, compared to $1.135 billion at constant exchange rates and $1.179 billion at actual exchange rates in 2021[150] - Adjusted operating profit based on long-term investment returns increased by 8% at constant exchange rates and 4% at actual exchange rates to $3.375 billion[152] - Annual premium equivalent sales grew by 9% to $4.393 billion in 2022[158] - New business profit decreased by 11% to $2.184 billion in 2022[158] - Markets outside Hong Kong recorded a combined new business profit growth of

Financial Performance - Prudential plc reported a strong focus on long-term opportunities in the life insurance and asset management sectors in Asia and Africa for 2022[9]. - The financial performance details are available in the financial review section, highlighting key metrics and results[12]. - Prudential recorded annual premium equivalent sales of $2.213 billion in the first half of 2022, an increase of 9% compared to the first half of 2021[10]. - The total number of life insurance customers reached 19.3 million as of June 30, 2022, up from 18.6 million at the end of 2021[10]. - New business profit was $1.098 billion, a decrease of 5% due to rising interest rates affecting the European embedded value method and a decline in sales in Hong Kong[10]. - The adjusted operating profit for the insurance and asset management business grew by 6% year-on-year, with operating free surplus increasing by 12%[12]. - The total adjusted operating profit of the group increased by 8%, while the total operating free surplus earned by the group rose by 22%[12]. - The after-tax profit for 2022 was $1.06 billion, reflecting the impact of rising interest rates on bond asset values and the valuation rates used for policyholder liabilities[12]. - The total profit from continuing operations was $300 million, a decrease of 76% from $1.263 billion in the previous year[41]. - The total profit from continuing operations attributable to equity holders was $104 million, down from $1,063 million in the first half of 2021, reflecting a 90% decline[141]. Market Expansion and Strategy - The company aims to address significant savings and protection gaps in these markets, leading to increased demand for life insurance and savings products[2]. - Prudential plc's operational performance reflects a diversified growth strategy, focusing on multiple sources of growth[9]. - The company is actively pursuing market expansion and new strategies to enhance its service offerings[9]. - Prudential launched Prudential Syariah in Indonesia, marking a significant expansion into the Islamic insurance market[10]. - The company continues to invest in its agency channel, with a 5% increase in newly recruited agents compared to the first half of 2021[10]. - The company plans to expand its market presence in Southeast Asia, aiming for a 25% market share in the region by 2025[120]. - Prudential is exploring strategic acquisitions to bolster its product offerings, with a focus on health and wellness sectors[122]. Digital Innovation and Technology - The Pulse digital platform recorded 4.8 million sales leads in the first half of 2022, up from 4.3 million in the previous year, with related annual premium equivalent sales remaining stable at $158 million[14]. - The digital strategy focuses on enhancing service delivery to both new and existing customers through platforms like PruServices and PruForce[13]. - Prudential is investing £500 million in new technology and digital services to enhance customer experience and operational efficiency over the next two years[121]. - The company has implemented multiple defense measures against cyber threats, including DDoS protection through web application firewalls and AI-based endpoint security software[110]. - Prudential's cybersecurity and data privacy strategy includes four main objectives: business enablement, continuous improvement of network defenses, automation and optimization, and governance and assurance[110]. Risk Management and Governance - Prudential plc emphasizes the importance of clear strategies and proven execution capabilities to create long-term value for shareholders and stakeholders[4]. - The company is focused on risk management and governance to safeguard its operations and stakeholder interests[26]. - The group has established a governance framework to clearly define risk responsibilities and align with risk policies and standards[86]. - The group has established a risk governance framework led by the Group Risk Committee, which oversees risk policies and communication with business risk committees[89]. - The group is committed to sustainable compliance and constructive engagement with regulatory authorities[86]. - The company is integrating climate change as a cross-cutting risk into its risk framework and enhancing customer conduct risk management[86]. Environmental, Social, and Governance (ESG) Initiatives - The company aims to improve its environmental, social, and governance (ESG) strategies, aligning them with its business objectives and community engagement[15]. - Prudential aims to reduce weighted average carbon intensity by 25% before 2025 and has already exited direct equity investments in businesses with over 30% revenue from coal[18]. - The group’s environmental, social, and governance (ESG) strategy framework is detailed in its ESG report, highlighting its commitment to sustainable practices[89]. - The group is focusing on managing sustainability risks related to environmental, social, and governance (ESG) factors, which could negatively impact its reputation, customer retention, and long-term financial success[101]. Customer Engagement and Conduct - The company is committed to maintaining a culture of fairness and integrity in customer interactions, supported by appropriate compensation structures[116]. - Prudential has launched affordable digital products through the Pulse platform, targeting underserved communities with micro and low-cost insurance solutions[116]. - The company has established five customer conduct principles to ensure fair treatment, appropriate product offerings, and high levels of customer service[116]. - Prudential's risk assessment framework includes regular evaluations and monitoring of conduct risks to ensure compliance and effective management[116]. Financial Reporting and Compliance - Prudential's financial performance is reported under International Financial Reporting Standards, indicating a structured approach to financial reporting[112]. - The company confirmed that there were no significant uncertainties affecting its ability to continue as a going concern for at least the next twelve months[137]. - The financial results for the first half of 2022 have not been audited, and the previous year's results are derived from statutory accounts[136]. - The company is committed to ongoing discussions regarding the quantifiable impacts of IFRS 17 on its financial performance and position[139].

Financial Performance - Prudential achieved a cash dividend of $0.1723 per share for 2021, up from $0.1610 per share in 2020, reflecting a commitment to shareholder returns [17]. - The company reported a strong financial performance despite challenges posed by the COVID-19 pandemic, highlighting the resilience of its management and employees [16]. - In 2021, the company successfully raised capital and redeemed debt in Hong Kong despite market volatility, indicating resilience in challenging conditions [18]. - The group reported a European embedded value of $47.4 billion, indicating strong financial health and potential for future growth [43]. - The company reported a total IFRS net loss of $2.813 billion in 2021, compared to a net profit of $2.231 billion in 2020 [48]. - Adjusted operating profit from continuing operations grew by 16% (17% on a constant currency basis) in 2021 [48]. - The overall market share increased from 0.74% in 2020 to 0.86% in 2021, indicating strong growth relative to the industry [66]. - The total assets managed by the company include both externally managed funds and internally managed funds, with a significant portion reported from various Asian markets [5]. - The company paid out over $8.8 billion in claims for long-term insurance products during the year, reflecting its commitment to customer service and satisfaction [43]. Strategic Focus - The company completed a strategic repositioning to focus entirely on growth opportunities in Asia and Africa [15]. - Prudential's strategy aligns with public policy goals, leveraging its strengths to create unique value for shareholders [17]. - The company aims to streamline its management and operational model following the completion of its strategic repositioning [15]. - Prudential's strategy focuses on expanding its presence in Asia and Africa, leveraging predictable cash flows from its life insurance business [46]. - The company is focused on creating long-term shareholder value through strategic restructuring and market expansion efforts [18]. Environmental, Social, and Governance (ESG) Initiatives - Prudential plans to reduce the carbon emissions of its insurance portfolio, aiming for net-zero emissions by 2050 [17]. - The company has made significant progress in environmental, social, and governance (ESG) initiatives, with a dedicated board committee overseeing these efforts [21]. - The company is committed to achieving "net zero" emissions for the assets held by its insurance companies by 2050 [39]. - The company aims to create a sustainable business by integrating ESG considerations into its investment processes [41]. - The weighted average carbon intensity of the investment portfolio decreased by 23% compared to the 2019 baseline, with a target to reduce carbon emissions by 25% by 2025 [107]. - The group emphasizes managing climate change impacts and reducing carbon emissions from its business and investment activities, viewing environmental issues as long-term risks to sustainability [199]. Market Opportunities - The company recognizes significant growth potential in its markets, driven by increasing demand for life insurance and savings products [17]. - Demand for healthcare and insurance services in Asia and Africa remains strong, with the pandemic intensifying this need, driving structural growth for the company [18]. - The estimated health and protection gap in Asia is $1.8 trillion, with 80% of the population lacking insurance coverage [28]. - In Africa, less than 50% of the population has access to modern healthcare facilities [28]. - Prudential aims for new business profit growth rates to significantly exceed local GDP growth in markets where it operates [29]. Digital Transformation - Prudential's digital transformation initiatives, including the Pulse by Prudential app, aim to enhance customer engagement and reach a broader audience [42]. - The company aims to serve 50 million customers by 2025 as part of its digital transformation strategy [39]. - Pulse has been launched in 17 markets across Asia and Africa, providing services such as health assessments, risk factor identification, telemedicine, healthcare, and digital payments [55]. - The digital platform Pulse attracted a significant number of young customers, enhancing the company's market presence [72]. - The company is enhancing its information security management framework to address increased risks from digital business growth and cyber threats [190]. Employee Engagement and Support - Prudential's employee support initiatives during the pandemic included measures for emotional, mental, and financial well-being [17]. - Employee engagement scores are above the global industry average, reflecting improved participation and commitment within the workforce [22]. - The company paid $1 billion in salaries and wages to employees during the year, providing significant support for health and mental well-being [49]. - The company is committed to continuous improvement in diversity and inclusion, with new initiatives established to support these goals [22]. - The company is committed to providing employees with opportunities to express their opinions and is adopting flexible work models to enhance skills and motivation [173]. Risk Management - Prudential's risk management and compliance functions are focused on maintaining the group within its risk appetite while adapting to unique risks in emerging markets [166]. - The group has established a robust risk governance framework, including risk identification, measurement, and assessment processes aligned with business strategies [184]. - The group employs stress and scenario testing to identify potential major risks that could significantly impact its operations [179]. - The group’s risk committee is authorized to approve adjustments to limits, triggers, and indicator systems, ensuring alignment with overall risk appetite [183]. - The group faces significant equity risk due to the majority of its products, including both participating and non-participating savings products, being invested in equity assets [195]. Financial Position and Capital Management - Prudential plc's eligible group capital resources amounted to $44.4 billion as of December 31, 2021, an increase from $34.9 billion in 2020 [151]. - The group regulatory capital surplus over the minimum capital requirement was $33.7 billion, with a coverage ratio of 414% as of December 31, 2021, compared to 344% in 2020 [151]. - The group anticipates that dividend growth will align with the growth of operating free surplus earnings, excluding appropriate adjustments for central costs [147]. - The company successfully issued new equity in October 2021, contributing to a $4.2 billion increase in shareholders' equity, excluding the impact of the Jackson spin-off [135]. - The group has maintained a strong market presence as an issuer over the past decade, enhancing its ability to access debt capital markets [196].

Financial Performance - Prudential plc reported a profit from new business in continuing operations of $1.176 billion for the first half of 2021, representing a 29% increase compared to the same period in 2020[6]. - The operating free surplus earned from continuing operations was $1.112 billion, reflecting a 13% increase year-over-year[6]. - Adjusted operating profit from continuing operations was $1.571 billion, up 22% from $1.286 billion in the first half of 2020[6]. - The IFRS profit after tax from continuing operations was $1.070 billion, a significant increase of 72% compared to $622 million in the previous year[6]. - The first interim ordinary dividend declared was 5.37 cents per share[5]. - The total equity attributable to shareholders, including Jackson, was $45.8 billion as of June 30, 2021[6]. - The average annualized return on equity from continuing operations was 21%[10]. - The total comprehensive income from continuing operations for the first half of 2021 was $907 million, compared to $421 million in the first half of 2020[120]. - The total comprehensive loss for the first half of 2021, including discontinued operations, was $(5,667) million, compared to a gain of $311 million in the same period of 2020[120]. - The profit attributable to equity holders from continuing operations for the first half of 2021 was $1,063 million, compared to $600 million in the same period of 2020[117]. Business Strategy and Growth - Prudential plc plans to raise approximately $2.5 to $3 billion in new equity following the proposed spin-off of Jackson, focusing on growth in Asia and Africa[8]. - The company aims to serve 50 million customers by 2025 through significant investments in talent and systems[8]. - Prudential plc anticipates long-term double-digit growth in embedded value per share, supported by new business profit growth rates exceeding GDP growth in the markets where it operates[8]. - The company aims to strengthen its position in Hong Kong and Southeast Asia while focusing on major economies like China, India, Indonesia, and Thailand for growth opportunities[12]. - The company is enhancing its digital capabilities to mitigate the impact of COVID-19 on face-to-face sales[12]. - The company plans to leverage its digital capabilities through the Pulse app to meet the substantial demand in the mass market and SMEs[13]. - Prudential's asset management arm, managing $254 billion across 11 Asian markets, aims to diversify its product offerings and enhance investment strategies[13]. - The company is committed to integrating its products and services with its life insurance business to provide comprehensive coverage in life, health, and financial products[13]. Market Performance - The company reported a 17% increase in new business sales in Asia and Africa, reaching $6.2083 billion, with new business profit growing by 25%[10]. - New business profit for the period increased to $1.176 billion, driven by sales growth and favorable product mix changes[10]. - The overall annual premium equivalent sales for growth markets increased by 22%, with notable growth in Vietnam (16%), India (33%), the Philippines (55%), and Africa (29%)[12]. - In Malaysia, annual premium equivalent sales grew by 66%, driven by a more than doubling of agency sales, with new business profit increasing by 59%[12]. - In Singapore, annual premium equivalent sales increased by 58%, with new business profit growing by 65% due to improved sales and favorable economic assumptions[12]. Risk Management - The group effectively managed risks during the first half of 2021, benefiting from strong governance and control systems[60]. - The ongoing pandemic continues to pose risks, with varying vaccine access impacting recovery across different markets[61]. - The group is preparing for the separation of Jackson as an independent business, with risk management remaining within the group framework until the split is implemented[60]. - The group has implemented innovative measures during the pandemic to ensure uninterrupted service to policyholders[61]. - The group is committed to fulfilling obligations to customers and employees during the crisis[61]. Regulatory and Compliance - Prudential plc's group regulatory framework has changed to the Hong Kong Insurance Authority since October 21, 2019, with new regulations effective from March 29, 2021[108]. - The group expects to comply with the new measures set by the Hong Kong Insurance Authority, which includes monitoring to identify increased systemic risks[108]. - Prudential is actively monitoring regulatory changes across major Asian markets, including Hong Kong and Malaysia, which may impact compliance and operational risks[109]. - The group is engaging with national regulators and international standard setters to ensure compliance with new regulatory developments[109]. Environmental, Social, and Governance (ESG) - The company is committed to reducing its carbon footprint and has joined the Net Zero Asset Owner Alliance[63]. - The group published its new Environmental, Social, and Governance (ESG) strategy framework focusing on health and financial security, climate change management, and building social capital[67]. - The group aims to achieve "net zero" carbon emissions for its insurance asset portfolio by 2050, confirmed at the 2021 Annual General Meeting on May 13, 2021[69]. - Prudential's strategy framework, established in 2020, focuses on environmental, social, and governance (ESG) issues, aiming to enhance risk management related to climate risks[110]. - The group has implemented a comprehensive ESG strategy framework that includes risk identification and integration of ESG factors into investment processes[111]. Operational Resilience - The company is focused on maintaining operational resilience through flexible distribution, innovative product development, and enhanced customer communication[15]. - The group is enhancing its operational risk capabilities by establishing a dedicated audit and risk committee for its subsidiary, Pulse Ecosystems Limited[82]. - The group has established a comprehensive risk management process to identify emerging and major risks across its operations, integrating both top-down and bottom-up perspectives[84]. - The group conducts stress and scenario testing, including reverse stress testing, to identify potential failure points in its business model and assess significant risks[85].