18 Jan 2000
Prudential 1999 new business results
- Record total funds inflow of over £18bn
- Total long term insurance and investment premiums up 61% to £12.3bn
- UK insurance and investment premiums up 61% to £7.4bn
- Jackson National Life premiums up 43% to £4.1bn
- Asia insurance and investment premiums over four times 1998 levels
- egg deposits reach £7.6bn - customers exceed 800,000, including 175,000 egg card accounts.
Prudential's group-wide operations enjoyed a record year in 1999 with total insurance and investment sales of £12.3bn, up 61% on 1998. Banking deposits continued their strong performance and now stand at £8.1bn, including £7.6bn of egg deposits.
In the UK, total insurance and investment premiums of £7.4bn were also up 61% over 1998. This increase predominantly reflects the continued strong growth of the IFA channel, which was up 76% to £5.4bn. The IFA channel now accounts for almost three quarters of Prudential's UK insurance and investment sales. Sales by M&G for the eight months since acquisition totalled £583m, an increase of 20% over the equivalent prior year period.
Overseas, Jackson National Life sales continued their strong growth up 43% on prior year at £4.1bn. Within this result, variable annuity sales were more than double 1998 volumes at £1.2bn.
In Asia, new business premiums were more than four times 1998 volumes. Insurance sales have more than doubled to £288m, while mutual fund sales in India were £583m, compared to the seven months' sales of £72m in 1998.
UK banking operations continue to perform strongly, with £8.1bn of deposits at year end and an asset book of over £2.0bn. egg now has in excess of 800,000 customers and has accepted in excess of 175,000 credit card accounts in the four months since launch.
Deputy group chief executive Jonathan Bloomer commented:
"Prudential's new business figures represent another very strong performance with a record £18bn inflow of funds. This provides further confirmation of the success of our strategy of broadening distribution reach and increasing product choice across all of our businesses.
In the US, variable annuity sales were more than double 1998's level and in Asia sales have quadrupled, representing significant progress in both these markets.
I am particularly pleased by the progress in integrating M&G with our existing fund management operations, and egg continues to show excellent growth. The response to our new egg card has been tremendous and we continue to acquire new customers at an impressive rate."
Uk Operations
IFA BUSINESSES
In the twelve months to December 1999, IFA insurance and investment sales were up 76% to £5.4bn. This reflects the continued strong sales of Prudence Bond, totalling £1.9bn compared with £1.2bn in 1998, and the inclusion of eight months of M&G's IFA sales. In addition, the impact of two major bulk annuities sold by Prudential Annuities in July, added £1.1bn to the result. IFA sales now account for almost three quarters of UK insurance and investment sales (1998: 66%).
M&G
M&G sales (IFA and direct) for the eight months to December 1999 were £583m, up 20% on the same period in 1998. Total funds under management stood at £20.4bn up from £18.5bn twelve months ago. M&G's corporate bond funds were particularly successful, attracting new funds of £347m.
PRUDENTIAL RETAIL
Consultant productivity continues to improve at Prudential Retail where insurance and investment sales have grown by 16% over 1998 to £1.8bn. Over the same period, sales force headcount has been reduced by over 40% to less than 1,900. 1999 has seen a shift away from our traditional regular premium pension products, with strong growth in single premium investment bonds.
Mortgage sales also continue to perform strongly, with a net increase in Prudential branded mortgage business of £600m in 1999.
egg: AND PRUDENTIAL BANKING
egg continues to launch new products and expand its customer services. During 1999 egg launched the egg card and internet shopping zone as well as offering internet only savings accounts and on-line mortgage and loan application facilities.
Jackson National Life
Total insurance and investment sales were 43% ahead of 1998 at £4.1bn, with variable annuities more than double the prior year at £1.2bn reflecting Jackson's successful marketing strategies, new product development and the on-going strength of the US equity market.
Fixed annuities are 23% ahead of prior year at £826m, after a slow start to the year, benefiting from the recent increases in US interest rates. Fourth quarter fixed annuity sales of £257m were more than double that in the equivalent period last year.
Asia
Total insurance and investment sales in Asia have more than quadrupled compared to the corresponding period in 1998.
Total insurance sales more than doubled to £288m due, in part, to the continuing strong performance of the PruInvestor Bond and the PruLink HiSaver Account in Singapore.
Mutual fund sales in India reached £583m for the year. Gross redemptions in the quarter totalled £38m bringing redemptions for the year to £272m, reflecting the liquid nature of the money market funds.
Enquiries
Jeremy Reynolds / Kevin Russell
Prudential Media Relations
Tel: 0171 548 3721 / 3723
David Doyle
Investor Relations
Tel: 0171 548 3753
PRUDENTIAL PLC - 1999 NEW BUSINESS PREMIUMS - FULL YEAR
Schedule 1
Single Regular Total
1999 1998 +/- 1999 1998 +/- 1999 1998 +/-
£m £m % £m £m % £m £m %
____________________________________________________________________
UK Operations
IFA Channel:
Individual Pensions 218 216 1% 50 42 19% 268 258 4%
Corporate Pensions 593 434 37% 95 53 79% 688 487 41%
Life 2,084 1,434 45% 75 74 1% 2,159 1,508 43%
Annuities 1,805 699 158% - - 0% 1,805 699 158%
Investment Products 372 54 589% 5 - 0% 377 54 598%
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Sub-Total 5,072 2,837 79% 225 169 33% 5,297 3,006 76%
____________________________________________________________________
DSS Rebates 64 33 94% - - 0% 64 33 94%
____________________________________________________________________
Total 5,136 2,870 79% 225 169 33% 5,361 3,039 76%
____________________________________________________________________
M&G (Direct):
Investment Products 200 - 0% 8 - 0% 208 - 0%
____________________________________________________________________
Total 200 - 0% 8 - 0% 208 - 0%
____________________________________________________________________
Prudential Retail:
Individual Pensions 35 41 (15%) 51 75 (32%) 86 116 (26%)
Corporate Pensions 4 3 33% 39 47 (17%) 43 50 (14%)
Life 883 608 45% 49 55 (11%) 932 663 41%
Annuities 534 462 16% - - 0% 534 462 16%
Investment Products 40 81 (51%) 7 15 (53%) 47 96 (51%)
____________________________________________________________________
Sub-Total 1,496 1,195 25% 146 192 (24%) 1,642 1,387 18%
____________________________________________________________________
DSS Rebates 175 175 0% - - 0% 175 175 0%
____________________________________________________________________
Total 1,671 1,370 22% 146 192 (24%) 1,817 1,562 16%
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Total UK Operations:
Individual Pensions 253 257 (2%) 101 117 (14%) 354 374 (5%)
Corporate Pensions 597 437 37% 134 100 34% 731 537 36%
Life 2,967 2,042 45% 124 129 (4%) 3,091 2,171 42%
Annuities 2,339 1,161 101% - - 0% 2,339 1,161 101%
Investment Products 612 135 353% 20 15 33% 632 150 321%
____________________________________________________________________
Sub-Total 6,768 4,032 68% 379 361 5% 7,147 4,393 63%
____________________________________________________________________
DSS Rebates 239 208 15% - - 0% 239 208 15%
____________________________________________________________________
Total UK Operations 7,007 4,240 65% 379 361 5% 7,386 4,601 61%
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Jackson National Life:
Fixed Annuities 826 670 23% - - 0% 826 670 23%
Equity Linked Index
Annuities 431 283 52% - - 0% 431 283 52%
Variable Annuities 1,187 531 124% - - 0% 1,187 531 124%
Guaranteed Investment
Contracts 994 1,351 (26%) - - 0% 994 1,351 (26%)
GIC-European
Medium Term Note 624 - 0% - - 0% 624 - 0%
Life - - 0% 24 28 (14%) 24 28 (14%)
____________________________________________________________________
Sub-Total 4,062 2,835 43% 24 28 (14%) 4,086 2,863 43%
____________________________________________________________________
Prudential Asia:
Insurance Products 182 42 333% 106 79 34% 288 121 138%
Investment Products 583 72 710% - - 0% 583 72 710%
____________________________________________________________________
Sub-Total 765 114 571% 106 79 34% 871 193 351%
____________________________________________________________________
Group Total:
Insurance Products 10,639 6,982 52% 489 453 8% 11,128 7,435 50%
Investment Products 1,195 207 477% 20 15 33% 1,215 222 447%
____________________________________________________________________
Group Total 11,834 7,189 65% 509 468 9% 12,343 7,657 61%
____________________________________________________________________
1999 1998
£m £m
____________________________________________________________________
UK Banking Products
Funds Under Management:
Prudential Banking 577 856
egg:| 7,565 1,332
____________________________________________________________________
Total 8,142 2,188
____________________________________________________________________
Asset Book:
Prudential Banking 1,255 664
egg:| 802 11
____________________________________________________________________
Total 2,057 675
____________________________________________________________________
General Insurance
UK Gross Premiums Written 318 310
____________________________________________________________________
Schedule 2
Single Regular Total
1999 1998 +/- 1999 1998 +/- 1999 1998 +/-
£m £m % £m £m % £m £m %
____________________________________________________________________
UK Operations
Retail IFA:
Individual Pensions 179 216 (17%) 48 42 14% 227 258 (12%)
Corporate Pensions 110 45 144% 14 16 (13%) 124 61 103%
Life 2,076 1,434 45% 74 74 0% 2,150 1,508 43%
Annuities 118 93 27% - - 0% 118 93 27%
Investment Products 49 54 (9%) 3 - 0% 52 54 (4%)
____________________________________________________________________
Sub-Total 2,532 1,842 37% 139 132 5% 2,671 1,974 35%
____________________________________________________________________
DSS Rebates 64 33 94% - - 0% 64 33 94%
____________________________________________________________________
Total 2,596 1,875 38% 139 132 5% 2,735 2,007 36%
____________________________________________________________________
Prudential Group Pensions:
Corporate Pensions 483 389 24% 81 37 119% 564 426 32%
Annuities 147 155 (5%) - - 0% 147 155 (5%)
____________________________________________________________________
Total 630 544 16% 81 37 119% 711 581 22%
____________________________________________________________________
Prudential Annuities:
Annuities 1,540 451 241% - - 0% 1,540 451 241%
____________________________________________________________________
M&G IFA:
Individual Pensions 39 - 0% 2 - 0% 41 - 0%
Life 8 - 0% 1 - 0% 9 - 0%
Investment Products 323 - 0% 2 - 0% 325 - 0%
____________________________________________________________________
Total 370 - 0% 5 - 0% 375 - 0%
____________________________________________________________________
Total IFA Channel: 5,136 2,870 79% 225 169 33% 5,361 3,039 76%
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M&G Summary (IFA + Direct):
Individual Pensions 39 - 0% 2 - 0% 41 - 0%
Life 8 - 0% 1 - 0% 9 - 0%
Investment Products 523 - 0% 10 - 0% 533 - 0%
____________________________________________________________________
Total 570 - 0% 13 - 0% 583 - 0%
____________________________________________________________________
Notes to Schedules:
1.The table above analyses UK IFA channel sales by business unit and provides a summary of the M&G new business premiums for the eight month period from acquisition to 31 December.
2.The figures for overseas operations have been calculated using average exchange rates. The applicable rate for Jackson National Life is 1.62 (December 1998 - 1.66). After adjusting for the impact of foreign currency movements, the Group's single premium sales increased by 63%, and regular premium sales increased by 8%.
3.The 1998 figures exclude the results of the Australian and New Zealand operations that were sold in that year.