|Copyright:||A.M. Best Company, Inc.|
U.K.-based financial services group Prudential plc reported a 2009 after-tax profit of 676 million pounds (748 million euros) in 2009, up from a loss of 396 million pounds in 2008.
The figure, attributable to equity holders of the company, was based on International Financial Reporting Standards. Prudential also reported an 8% jump in 2009 European embedded value operating profit to 3.09 billion pounds, based on longer-term investment returns.
Prudential’s retail sales rose by 11% to 2.89 billion pounds. New business profits, based on European Embedded Value, were up 34% to 1.6 billion pounds. Tidjane Thiam, group chief executive, said the EEV new business profit margin rose to a “truly outstanding” 56% from 42%
Last year “was a record year for Prudential,” Thiam, said in a conference call. “Overall, we have delivered record retail sales, record growth in profit and record margins. And we have achieved all these while consuming less capital. As a result, our capital position has never been stronger, and our strategic focus has never been clearer.”
Prudential’s performance in 2009, Thiam said, “was delivered against a backdrop of unprecedented market turbulence.” He said the market uncertainty that occurred during the second half of 2008 pointed Prudential to a “deliberately defensive strategy” in 2009. The group emphasized the conservation of capital and the generation of cash, he said.
“We prioritized value over volume, strictly allocating capital to the product and channels that delivered the highest rates of return over the shortest payback periods,” Thiam said.
The release of the results came as Prudential announced its intention to acquire AIA Group Ltd., the international life insurance subsidiary of American International Group Inc. Based on European embedded value, Prudential said its own Asian operation had a 2009 operating profit of 1.15 billion pounds, from 1.23 billion pounds in 2008.
(By Robert O’Connor, London editor: Robert.OConnor@ambest.com)