Financial Performance - Adjusted operating profit from continuing operations was $5.31 billion, representing a 20% increase compared to $4.41 billion in 2018[3]. - Operating free surplus from continuing operations was $3.76 billion, up 10% from $3.41 billion in the previous year[3]. - New business profit from continuing operations in life insurance was $4.41 billion, a decrease of 6% from $4.71 billion in 2018[3]. - IFRS post-tax profit from continuing operations was $1.95 billion, down 32% from $2.88 billion in 2018[3]. - Net cash remittances from continuing operations amounted to $1.47 billion, a 3% increase from $1.42 billion in 2018[3]. - Total shareholder equity exceeding the group's minimum capital requirement was $9.5 billion, a decrease of 2% from $9.7 billion in 2018[3]. - The adjusted operating profit based on long-term investment returns for 2019 increased by 20%, reflecting continuous growth and resilience in the Asian business[19]. - The after-tax profit from continuing operations under IFRS for 2019 was $1.953 billion, accounting for Jackson's after-tax loss of $380 million[19]. - The company reported a significant decline in interest rates in 2019, which further decreased in 2020, impacting new business profits and IFRS earnings due to market volatility and the COVID-19 pandemic[21]. - The total cash flow for the holding company was $(2.006) billion, a significant decline from $1.178 billion in the previous year[115]. Dividends and Shareholder Returns - The full-year ordinary dividend was set at 46.26 cents per share, based on the 2019 base of 36.84 cents[4]. - The company has set a new progressive dividend policy for 2020, based on a base of $0.3684 per share from 2019[12]. - The group paid dividends of $1.634 billion in 2019, slightly down from $1.662 billion in 2018[117]. Business Strategy and Market Focus - The company plans to continue focusing on long-term value for customers[9]. - The company aims to broaden its capabilities in structural growth markets, targeting more Asian customers and expanding into Africa, one of the fastest-growing regions globally[12]. - The company is focused on expanding its product range and distribution network to maximize its role in meeting the demand for guaranteed income retirement products in the U.S.[19]. - Prudential plc's strategy focuses on capturing long-term structural opportunities in Asia and Africa, aiming to meet the growing needs of the middle class for protection and investment products[35]. - The company aims to capture the growth potential in Asia, where it is expected that two-thirds of global life insurance growth will come from the region over the next decade, increasing its market share from 32% to 42% by 2029[59]. Customer Engagement and Innovation - The company is committed to improving service and products to enhance customer loyalty, which is a key factor in its financial stability[12]. - The company is focused on digital innovation and expanding financing channels to address the needs of an aging global population[16]. - The company launched a new end-to-end digital health application, Pulse by Prudential, to enhance its service offerings[20]. - The digital health super app, Pulse by Prudential, was launched in eight markets with over 1 million downloads[55]. - The company aims to provide a comprehensive digital customer experience and new value-added solutions through ongoing innovation[19]. Market Expansion and Performance - The company achieved double-digit growth in annual premium equivalent sales in six markets and new business profit in eight markets, highlighting the strength of its diversified business portfolio[19]. - Annual premium equivalent sales in Hong Kong increased by 8%, while new business profit rose by 29%[20]. - In mainland China, annual premium equivalent sales grew by 53%, driving new business profit up by 38%[20]. - In Africa, annual premium equivalent sales surged by 76% to $82 million, up from $47 million in the previous year[20]. - The company expanded its presence in Southeast Asia by establishing a new joint venture in Shaanxi, adding seven cities and 14 sales offices[20]. Risk Management and Regulatory Compliance - The group is currently transitioning to a new regulatory framework under the Hong Kong Insurance Authority, which is expected to be finalized in 2020[170]. - The group has established a comprehensive risk governance framework led by the Group Risk Committee, supported by independent non-executive directors from major subsidiaries[191]. - The group emphasizes the importance of balancing risk with profitability and growth in decision-making processes[191]. - The group continues to monitor regulatory developments at both national and global levels, which will significantly impact its operations, business development, and risk management practices[170]. Community Engagement and Corporate Social Responsibility - The company had 18,125 global employees and engaged in community investment of $2.91 million[7]. - The company continues to actively invest in community projects across multiple markets, contributing to local development[16]. - The company allocated $6.7 million to charitable causes in 2019[10]. - The company has provided additional free coverage and cash benefits to customers diagnosed with COVID-19 across eight Asian markets, including a donation of RMB 15 million to support efforts against the disease[73]. Economic and Market Conditions - The macroeconomic environment remains uncertain, but the core demand for long-term savings and protection products remains strong[19]. - The global economic growth slowed in 2019, driven by a contraction in the manufacturing sector, particularly in the Eurozone, the UK, and parts of Asia[167]. - The ongoing low interest rate environment poses challenges to the capital position and profitability of new business for life insurance companies[198]. - The geopolitical landscape in 2019 was marked by increasing polarization, with significant protests occurring globally, which could undermine social order and test the resilience of businesses and governments[169].

Prudential, Plc. (NYSE:PUK) Full Year 2019 Earnings Conference Call March 11, 2020 7:30 AM ET Company Participants Mike Wells – Group Chief Executive Officer Mark FitzPatrick – Group Chief Financial Officer & Chief Operating Officer James Turner – Group Chief Rick Officer and Compliance Officer Chad Myers – Executive Vice President and Chief Financial Officer-Jackson Holdings LLC Nic Nicandrou – Chief Executive, Prudential Corporation-Asia Michael Falcon – Chief Executive Officer-Jackson Holdings LLC Confer ...

Financial Performance - Adjusted IFRS operating profit from continuing operations for H1 2019 was £2.024 billion, a 21% increase compared to £1.669 billion in H1 2018[2]. - Operating free surplus from continuing operations reached £1.502 billion, reflecting a 28% growth from £1.173 billion in the previous year[2]. - New business profit from continuing operations in life insurance was £1.643 billion, a 3% increase from £1.588 billion in H1 2018[2]. - The tax-adjusted IFRS profit for H1 2019 was £1.540 billion, up 14% from £1.356 billion in H1 2018[2]. - Operating profit increased by 14% to £2.024 billion, with a 21% increase on a constant currency basis[7]. - The total profit from continuing operations after tax was £895 million, reflecting a 30% decrease, or 34% on a constant currency basis[21]. - The company reported a total profit of £1,540 million for the first half of 2019, compared to £1,356 million in the same period of 2018[132]. - The profit from continuing operations for the first half of 2019 was £895 million, a decrease from £1,273 million in the same period of 2018[135]. - The total comprehensive income for the first half of 2019 was £3,294 million, compared to £584 million in the same period of 2018, representing a significant increase[135]. Dividends and Shareholder Returns - The first interim ordinary dividend for 2019 was 16.45 pence, representing a 5% increase from 15.67 pence in 2018[1]. - The company declared an interim dividend of 16.45 pence per share for the first half of 2019, an increase of 4.95% from 15.67 pence in the same period of 2018[133]. - The group aims to achieve an annual shareholder cost-saving target of approximately £145 million by 2022[34]. Business Operations and Strategy - The group remains focused on enhancing operational efficiency and investing for future growth despite geopolitical and macroeconomic uncertainties[6]. - The group plans to complete the separation of M&GPrudential by Q4 2019, aiming to enhance operational efficiency and stakeholder alignment[7]. - The company is focused on structural growth markets in Asia and accelerating diversification in the US, aiming for better cash returns[15]. - The company is actively exploring diversification strategies through reinsurance and third-party financing to support its growth initiatives[8]. - Prudential is committed to ongoing monitoring of policyholder behavior and reviewing related assumptions to mitigate policyholder behavior risks[93]. Market and Economic Conditions - The economic growth in the US and China was noted at 1.3% and 3.0% respectively, while the UK faced uncertainties due to Brexit[7]. - Global economic growth has continued to slow since the beginning of the year, with manufacturing in the US, Eurozone, UK, and parts of Asia showing notable contraction[82]. - The geopolitical landscape remains uncertain, with trade and economic policies exhibiting national protectionism, particularly concerning Brexit and US-China relations[85]. Risk Management - The group has established a mature and integrated risk framework to monitor and manage risks during the transition period, ensuring operations remain within risk tolerance[82]. - Prudential's risk management framework is designed to monitor and report on the group's risk and solvency status from economic, regulatory, and rating perspectives[99]. - The group is actively managing risks related to data protection regulations, which have been incorporated into business requirements[82]. - The company is focused on addressing risks related to information security and data privacy, which are increasingly complex and evolving globally[113]. Capital and Solvency - The group’s solvency II coverage ratio decreased to 222% from 232%, a decline of 10 percentage points[1]. - The solvency II surplus is estimated at £16.7 billion, with a coverage ratio of 222%, down from £17.2 billion and 232% on December 31, 2018[8]. - The estimated solvency capital as of June 30, 2019, was £11.1 billion, which helps mitigate the impact of market volatility[117]. Investments and Acquisitions - The group made significant investments in Asia, including a £197 million acquisition of a 65% stake in TMB Asset Management and a £662 million regional strategic partnership with UOB[7]. - Prudential completed the acquisition of 51% of Group Beneficial, a major life insurance company in Cameroon, Ivory Coast, and Togo, enhancing its scale in the growing African market[72]. - The company announced plans to acquire a controlling stake in Thanachart Fund Management, which manages over £5 billion in assets, pending local regulatory approval[75]. Financial Position and Assets - Total assets under management grew by 6% to £341.1 billion, compared to £321.2 billion at the end of 2018[7]. - The total assets amounted to £554,683 million, an increase from £501,170 million in the same period of 2018, representing a growth of approximately 10.4%[140]. - The company's total liabilities decreased to £534,988 million from £485,280 million, which is a reduction of about 10.2%[140]. Regulatory Developments - The International Accounting Standards Board announced IFRS 17, which will significantly change the reporting for insurance entities starting in 2022[114]. - The group is currently engaging with the Hong Kong Insurance Authority regarding a proposed group-wide regulatory framework, expected to be published in the second half of 2020[114]. - The group has agreed to adopt local capital aggregation methods following the separation of M&G Prudential, determining regulatory capital requirements[114].

Financial Performance - Prudential plc reported an adjusted operating profit of £4.827 billion for 2018, an increase of 3% from £4.699 billion in 2017[4]. - The company achieved a related free surplus of £4.047 billion, reflecting an 11% increase compared to £3.640 billion in the previous year[4]. - New business profit in life insurance reached £3.877 billion, marking a 7% growth from £3.616 billion in 2017[4]. - The IFRS profit after tax rose significantly by 26% to £3.013 billion, up from £2.390 billion in 2017[4]. - The net cash remittances from business units totaled £1.732 billion, a slight decrease of 3% from £1.788 billion in the prior year[4]. - Shareholder equity under IFRS increased to £17.2 billion, representing a 7% growth from £16.1 billion in 2017[4]. - The European embedded value shareholder equity reached £49.8 billion, an 11% increase from £44.7 billion in the previous year[4]. - The group solvency II capital surplus was reported at £17.2 billion, a substantial increase of 29% from £13.3 billion in 2017[4]. - The group reported a 6% increase in operating profit to £4.827 billion, reflecting a 3% increase when adjusted for actual exchange rates[16]. - The group achieved a net increase of £1.2 billion in qualifying debt during the period[132]. - The total cash remittance from M&G Prudential was £654 million, a 2% increase from the previous year[160]. - The company reported a £2.480 billion insurance profit margin, up from £2.302 billion the previous year, showing improved profitability[139]. - The total liabilities for the with-profits policyholders increased to £161.136 billion, reflecting strong performance in the Asian market[137]. Business Strategy and Separation - Prudential plc is making progress in the planned separation of M&G Prudential from Prudential plc, aiming to enhance value for stakeholders[8]. - The company plans to separate M&GPrudential into two independent listed companies, allowing for better capital deployment and meeting evolving customer needs[16]. - The board is focused on ensuring a smooth transition during the M&GPrudential separation and has appointed Mike Evans as chairman of M&GPrudential[9]. - Prudential announced plans to spin off its UK and European business, M&G Prudential, to create two independent listed companies with distinct investment characteristics and opportunities[30]. - The group announced plans to split its UK and European businesses, with a reinsurance of a £12 billion annuity portfolio expected to be completed by June 30, 2019[178]. - Prudential's acquisition of John Hancock Life Insurance Company's group annuity business involved approximately 200,000 in-force certificates representing reserves of about $5.5 billion under International Financial Reporting Standards[183]. - The company aims to modernize its operations through mergers and transformation plans to become a simpler, cost-effective, and digital organization[114]. - The group expects to increase its overall debt by £7.6 billion as part of the restructuring before the split, which includes £6.4 billion of core structural borrowings[178]. Market Opportunities and Growth - The Asian business continues to lead performance, with over 85% of operating income derived from insurance, fees, and dividends[16]. - The U.S. population aged 65 and older is projected to grow from 55 million in 2020 to 72 million by 2030, presenting significant market opportunities[16]. - Prudential is expanding its presence in Africa, which has one of the lowest insurance penetration rates globally, currently operating in five markets[16]. - By 2030, the middle-class population in Asia is expected to double to 3.5 billion, indicating significant market potential[21]. - The insurance penetration rate in Asia is only 2.7% of GDP, compared to 7.2% in the UK, highlighting a substantial insurance gap estimated at $40 trillion for life coverage and $1.8 trillion for health coverage[21]. - The estimated health protection gap in Asia reached $1.8 trillion in 2017, highlighting significant market opportunities[69]. - Prudential's strategy includes expanding its distribution capabilities and enhancing digital tools to capture market opportunities[40]. - Prudential's overall strategy focuses on expanding its customer base and market penetration across Asia, leveraging its diverse talent pool and operational capabilities[87]. Digital Innovation and Customer Engagement - The company is developing innovative digital solutions in Asia and has launched a new retirement product portfolio in the United States[9]. - Prudential continues to enhance its digital tools to improve the efficiency of over 4,900 financial advisors in Singapore[18]. - The implementation of digital tools has led to a nearly 40% submission rate for electronic claims across six businesses[84]. - The introduction of PRUconnect in Thailand, a digital customer service platform, aims to enhance customer engagement with over 44 million active LINE users[79]. - Prudential's collaboration with Tata Consultancy Services aims to improve services for savings and retirement customers in the UK and Europe[24]. - The company is actively investing in digital technology to enhance customer service efficiency[16]. - An exclusive partnership was established with Babylon Health to provide AI-driven digital health services across 12 markets in Asia[67]. Social Responsibility and Community Engagement - The company has invested over £27 million in community projects, including the Cha-Ching financial education platform, which has reached over 2.6 million students since its launch[13]. - Over 9,000 global employees participated in the chairman's community service program, contributing more than 49,000 hours to various projects[13]. - The board is committed to maintaining positive social and economic impacts, as outlined in the corporate responsibility review[9]. - Prudential is focused on diversity and inclusion as a strategic priority, recognizing the importance of varied experiences and perspectives[11]. Risk Management and Regulatory Compliance - The group has established a mature and integrated risk framework to manage the complexities involved in the ongoing merger and split activities[182]. - Prudential's risk management approach is integrated into its business strategy, ensuring alignment with economic and political changes in operating regions[191]. - The group continues to monitor developments at both national and global levels, collaborating with government policy teams and regulators to ensure compliance[182]. - The implementation of the General Data Protection Regulation (GDPR) in May 2018 further strengthened individual rights regarding personal data usage by companies[183]. - Prudential is actively engaging with national governments and regulatory bodies to address regulatory risks, including foreign ownership[186]. Shareholder Returns and Dividends - The board decided to increase the full-year ordinary dividend by 5% to 49.35 pence per share, reflecting confidence in future business prospects[132]. - The company aims to achieve a 5% annual increase in ordinary dividends, maintaining its dividend policy while considering financial flexibility and investment opportunities[179]. - Prudential's earnings per share (EPS) increased to 1,920 pence in 2018 from 1,728 pence in 2017, reflecting a growth of approximately 11%[178].