Blueprint
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of November, 2017
PRUDENTIAL PUBLIC LIMITED COMPANY
(Translation of registrant's name into
English)
LAURENCE POUNTNEY HILL,
LONDON, EC4R 0HH, ENGLAND
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports
under
cover Form 20-F or Form 40-F.
Form
20-F X
Form 40-F
Indicate
by check mark whether the registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes
No X
If
"Yes" is marked, indicate below the file number assigned to the
registrant
in connection with Rule 12g3-2(b): 82-
16
November 2017
Prudential plc investor conference and business performance
update
Prudential
plc ("Prudential") is holding a conference for investors and
analysts on 16 November 2017 at the InterContinental Park Lane
Hotel in London. The event will start at 8.00am UK time, with
presentations covering the Group and our life insurance and asset
management operations in Asia, the US, and the UK and
Europe.
Mike
Wells, Group Chief Executive, said: "In today's presentations our
management teams will highlight the scale of the opportunity ahead
of us in our three key geographic regions and the quality of our
execution.
"In
Asia, we are meeting the health, protection and savings needs of a
rapidly growing middle class. In the US, we are addressing the
savings and retirement income requirements of the baby-boom
generation, and in the UK and Europe we are focused on the
opportunity presented by the converging life assurance and savings
markets.
"The
presentations will demonstrate the strength of our positioning, our
disciplined capital allocation and our market-leading capabilities,
which all combine to drive profitable growth - and the ability of
the Group to respond with pace to new opportunities."
Business performance update1
The Group continues to benefit from powerful and enduring
demand drivers and its established platforms in Asia, the US, and
the UK and Europe. Over the first nine months of 2017, life
insurance new business profit2 increased by 17 per cent to £2,469 million,
reflecting higher sales and more favourable economics. In asset
management, both M&G Prudential and
Eastspring3 have delivered a positive performance, with
combined third-party retail and institutional net inflows of
£12.8 billion, compared to net outflows of £8.0 billion
in the same period in 2016.
In
Asia, our diversified
portfolio of market-leading businesses continues to benefit from
the fast-growing demand across the region driven by an increasingly
affluent, growing population.
New business profit increased 15 per cent (24 per cent on an actual
exchange rate basis) to £1,616 million in the first nine
months, as a result of higher sales volumes, a richer health and
protection mix and the overall beneficial effect of higher interest
rates. The performance remains broad-based, with at least
double-digit growth in seven countries4, including China, Hong Kong and Singapore,
highlighting the strength of the regional
portfolio.
In the first nine months, APE sales increased by 5 per cent overall
(14 per cent on an actual exchange rate basis) and by 13 per cent
(23 per cent on an actual exchange rate basis) excluding our
reduced participation in the Hong Kong broker channel. The quality
of this growth is underpinned by double-digit increases in seven
countries4, higher contributions from both agency and
bancassurance channels, and a 16 per cent uplift in health and
protection sales. Outside Hong Kong, we have delivered diversified
sales growth of 24 per cent.
Eastspring's external assets under management3 increased to £44.3 billion at 30 September
2017 (31 December 2016: £38.0 billion5), reflecting year-to-date external net
inflows3 of £2.8 billion and the impact of positive
markets. Total assets under management, including internal
insurance assets and money market funds, increased to £130.9
billion (31 December 2016: £117.9 billion5), benefiting additionally from a continuation of
strong inflows from our life operations.
In the US, Jackson's new business profit increased 17 per
cent (28 per cent on an actual exchange rate basis) to £619
million in the first nine months, primarily reflecting the benefit
of higher interest rates compared to the prior year. Separate
account assets are up 13 per cent year-to-date to £125.5
billion (31 December 2016: £120.4 billion5), driven by continued positive net flows of
£2.7 billion and favourable market movements in the period.
While the near-term outlook for industry sales of variable
annuities remains uncertain pending clarification of regulatory
reforms in the US retirement market, Jackson's market-leading
variable annuity product proposition positions the business well
for new longer-term growth opportunities in the sizeable fee-based
adviser market.
In the UK
& Europe, M&G
Prudential has delivered external asset management net inflows of
£9.9 billion in the first nine months across a broad range of
Wholesale and Direct, and Institutional asset strategies. In
addition, continued demand for risk-managed solutions has driven
life insurance APE sales growth of 25 per cent over the same
period, with new business profit up 31 per cent to £234
million. This includes APE sales growth of 32 per cent from
PruFund-backed products, which generated net inflows of £6.6
billion. M&G Prudential's total assets under
management6 increased to £336.5 billion (31 December
2016: £310.8 billion), including growth of 12 per cent in
external asset management business to £153.5 billion and 32
per cent in PruFund assets to £32.6
billion.
M&G
Prudential, formed by the combination of our UK businesses, will
leverage its scale, financial strength, and complementary product
and distribution capabilities to enhance the development of
capital-light, digitally enabled, customer-focused solutions. The
integration of these businesses is progressing according to
plan.
The estimated Group shareholder Solvency II
surplus7 at 30 September 2017 was £12.8 billion,
equivalent to a cover ratio of 201 per cent (31 December 2016:
£12.5 billion, equivalent to a cover ratio of 201 per
cent).
Outlook
Prudential's
strategy remains centred on the clear structural opportunities in
each of its three key markets in Asia, the US, and the UK and
Europe. The Group's leading market positions, combined with
significant product and distribution capabilities, mean our
businesses are well placed for long-term growth and the continued
delivery of value for both customers and shareholders.
1 Year-on-year
percentage changes are stated on a constant exchange rate basis
unless otherwise stated.
2 New
business profit on business sold in the period, calculated in
accordance with EEV principles as defined in our Annual
Report.
3 Excludes
Asia Money Market Fund investment flows and assets under
management.
4 Excludes
Laos where amounts are immaterial.
5 As
reported (on an actual exchange rate basis).
6 Total
assets managed by M&G Prudential include internal insurance
funds of £183 billion (31 December 2016: £174 billion),
including PruFund-backed products.
7 The
Group Solvency II surplus represents the shareholder capital
position excluding the contribution to Own Funds and the Solvency
Capital Requirement from ring-fenced with-profits funds and staff
pension schemes in surplus. The estimated solvency position
includes the impact of recalculated transitionals at the valuation
date, which has reduced the Group shareholder surplus from
£13.6 billion to £12.8 billion. The formal Quantitative
Reporting Templates (Solvency II regulatory templates) include
transitional measures without this recalculation.
Contact:
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Media
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Investors/Analysts
|
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Jonathan
Oliver
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+44 (0) 20 7548 3537
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Chantal
Waight
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+44 (0) 20 7548 3039
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Jonathan
Miller
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+44
(0)20 7548 2776
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Richard
Gradidge
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+44
(0)20 7548 3860
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|
|
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William
Elderkin
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+44
(0)20 3480 5590
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|
|
|
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Notes to Editors:
Investor conference
Today's
investor conference is available to view via live webcast from
8.00am UK time and the presentation materials can also be viewed on
the Group website from the same time. To register for the webcast
please follow the link below or visit the Group website at
www.prudential.co.uk.
Link to webcast: http://www.investis-live.com/prudential/59de142115637311008541ca/hddh
Agenda
|
Time (UK time)
|
Topic
|
Speaker
|
|
From 07.30
|
Registration
|
|
|
08.00 - 08.20
|
Introduction
and Group overview
|
Mike
Wells
|
|
08.20 - 08.40
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Group
financial update
|
Mark
FitzPatrick
|
|
08.40 - 10.00
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Asia
|
Nic
Nicandrou, Lilian Ng, Guy Strapp
|
|
10.00 - 10.15
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Break
|
|
|
10.15 - 11.30
|
M&G
Prudential
|
John
Foley, Clare Bousfield, Anne Richards, Miguel Ortiz, Grant
Speirs
|
|
11.30 - 11.45
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Break
|
|
|
11.45 - 12.45
|
US
|
Barry
Stowe, Chad Myers
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12.45 - 13.30
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Group
Q&A
|
Mike
Wells and management team
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From 13.30
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Lunch
|
|
New business performance Q3 year to date
|
|
|
|
|
|
|
|
|
Actual Exchange Rate
|
|
Constant Exchange Rate
|
|
|
Q3 2017 £m
|
Q3 2016 £m
|
Change %
|
|
Q3 2016 £m
|
Change %
|
|
|
APE Sales
|
New Business Profit
|
APE Sales
|
New Business Profit
|
APE Sales
|
New Business Profit
|
|
APE Sales
|
New Business Profit
|
APE Sales
|
New Business Profit
|
|
Asia1
|
2,788
|
1,616
|
2,454
|
1,301
|
14%
|
24%
|
|
2,660
|
1,408
|
5%
|
15%
|
|
US
|
1,301
|
619
|
1,148
|
485
|
13%
|
28%
|
|
1,252
|
529
|
4%
|
17%
|
|
M&G Prudential
|
1,085
|
234
|
871
|
179
|
25%
|
31%
|
|
871
|
179
|
25%
|
31%
|
|
Total Group1
|
5,174
|
2,469
|
4,473
|
1,965
|
16%
|
26%
|
|
4,783
|
2,116
|
8%
|
17%
|
1
The Q3 2016 comparatives exclude the contribution from the sold
Korea life business (APE: £77 million; NBP: £5 million on
an actual exchange rate basis).
|
M&G Prudential and Eastspring external funds under
management
|
|
|
2017 £m
|
|
2016
£m
|
|
|
Actual Exchange Rate
|
|
Actual
Exchange Rate
|
|
|
At
1 Jan 2017
|
Net
flows
|
Market and other movements
|
At
30 Sep 2017
|
|
At
1 Jan
2016
|
Net
flows
|
Market
and other
movements
|
At
30 Sep
2016
|
|
M&G
Prudential Wholesale and Direct
|
64,209
|
7,770
|
2,724
|
74,703
|
|
60,801
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(7,195)
|
8,408
|
62,014
|
|
M&G
Prudential Institutional
|
72,554
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2,172
|
4,039
|
78,765
|
|
65,604
|
(940)
|
9,476
|
74,140
|
|
Total
M&G Prudential2
|
136,763
|
9,942
|
6,763
|
153,468
|
|
126,405
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(8,135)
|
17,884
|
136,154
|
|
Eastspring3
|
38,042
|
2,830
|
3,467
|
44,339
|
|
30,281
|
165
|
5,999
|
36,445
|
|
Total
|
174,805
|
12,772
|
10,230
|
197,807
|
|
156,686
|
(7,970)
|
23,883
|
172,599
|
2
The results exclude the contribution from PruFund products (net
inflows of £6.6 billion in the first nine months of 2017;
funds under management of £32.6 billion at 30 September 2017,
£24.7 billion at 31 December 2016). Total funds under
management including internal life operations were £336.5
billion at 30 September 2017, £310.8 billion at 31 December
2016.
3
The results exclude the contribution from internal life operations
and money market funds (net inflows of £5.5 billion in the
first nine months of 2017). Total funds under management including
internal life operations and money market funds were £130.9
billion at 30 September 2017, £117.9 billion at 31 December
2016.
Solvency II capital surplus
The estimated change in Group shareholder Solvency II surplus over
the first nine months of 2017 was driven by operational capital
generation of £2.3 billion, partially offset by adverse
currency movements net of other market and non-operating impacts of
£0.8 billion and by payment of the 2016 second interim
dividend and the 2017 first interim dividend, totalling £1.2
billion.
Financial calendar
2017
full-year results: 14 March 2018
2018
half-year results: 8 August 2018
Basis of Preparation
Period-on-period percentage increases are stated on a constant
exchange rate basis unless otherwise stated. All amounts are
comparable to the nine months ended 30 September 2016 unless
otherwise indicated.
|
|
Average Rate*
|
|
Closing Rate
|
|
Local Currency : £
|
Q3 2017
|
Q3 2016
|
% Change**
|
|
30 Sep 2017
|
30 Sep 2016
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% Change**
|
|
Hong Kong
|
9.94
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10.81
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9%
|
|
10.48
|
10.08
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(4)%
|
|
Indonesia
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17,013.41
|
18,547.39
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9%
|
|
18,070.69
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16,953.25
|
(6)%
|
|
Malaysia
|
5.54
|
5.69
|
3%
|
|
5.67
|
5.37
|
(5)%
|
|
Singapore
|
1.77
|
1.91
|
8%
|
|
1.82
|
1.77
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(3)%
|
|
US
|
1.28
|
1.39
|
9%
|
|
1.34
|
1.30
|
(3)%
|
*
Average rate is for the 9 month period to 30
September.
**
Change represents the appreciation (depreciation) of local currency
against GBP.
The key
economic assumptions are as follows:
|
|
|
|
Risk discount rate %
|
|
Government bond yield1
%
|
|
|
|
|
30 Sep 2017
|
30 Sep 2016
|
|
30 Sep 2017
|
30 Sep 2016
|
|
Asia operations:
|
|
|
|
|
|
|
|
Hong Kong2
|
3.6
|
3.1
|
|
2.3
|
1.6
|
|
|
Indonesia3
|
10.9
|
11.1
|
|
6.6
|
7.2
|
|
|
Malaysia3
|
6.9
|
6.0
|
|
4.0
|
3.6
|
|
|
Singapore
|
3.8
|
3.4
|
|
2.2
|
1.8
|
|
US operations: Variable
Annuity4
|
6.7
|
6.1
|
|
2.3
|
1.6
|
|
UK operations:5
|
4.8
|
4.3
|
|
1.8
|
1.3
|
1
For Asia and US operations the risk-free rates shown are 10-year
government bond yields. For UK operations 15-year gilt rates are
shown.
2
For Hong Kong the assumptions shown
are for US dollar-denominated business. For other business units,
the assumptions are for local currency-denominated
business.
3
As stated in our Half Year 2017 interim report (Note 13 in the EEV
basis financial statements), in order to reflect Prudential's most
recent assessment of the growth prospects of Asia operations, we
increased equity risk premiums in a number of business units at 30
June 2017.
4
For US operations the pre-tax expected long-term nominal rate of
return for US equities was 6.3 per cent at 30 September 2017 and
5.6 per cent at 30 September 2016.
5
For UK business, single implied risk
discount rates based on the Solvency II yield curve are shown,
mostly related to with-profits business.
The Solvency II estimate at 30 September 2017 has been prepared on
a consistent basis with that set out in the 2017 Half Year
Financial Report under 'Additional Financial Information' Section
II (c), which should be read in conjunction with the 'Risk Factors'
also set out in the 2017 Half Year Financial Report.
About Prudential plc
Prudential
plc and its affiliated companies constitute one of the world's
leading financial services groups, serving around 24 million
insurance customers, with £635 billion of assets under
management (as at 30 June 2017). Prudential plc is incorporated in
England and Wales and is listed on the stock exchanges in London,
Hong Kong, Singapore and New York. Prudential plc is not affiliated
in any manner with Prudential Financial, Inc., a company whose
principal place of business is in the United States of
America.
Forward-Looking Statements
This
document may contain 'forward-looking statements' with respect to
certain of Prudential's plans and its goals and expectations
relating to its future financial condition, performance, results,
strategy and objectives. Statements that are not historical facts,
including statements about Prudential's beliefs and expectations
and including, without limitation, statements containing the words
'may', 'will', 'should', 'continue', 'aims', 'estimates',
'projects', 'believes', 'intends', 'expects', 'plans', 'seeks' and
'anticipates', and words of similar meaning, are forward-looking
statements. These statements are based on plans, estimates and
projections as at the time they are made, and therefore undue
reliance should not be placed on them. By their nature, all
forward-looking statements involve risk and uncertainty. A number
of important factors could cause Prudential's actual future
financial condition or performance or other indicated results to
differ materially from those indicated in any forward-looking
statement. Such factors include, but are not limited to, future
market conditions, including fluctuations in interest rates and
exchange rates the potential for a sustained low-interest rate
environment, and the performance of financial markets generally;
the policies and actions of regulatory authorities, including, for
example, new government initiatives; the political, legal and
economic effects of the UK's decision to leave the European Union;
the impact of continuing designation as a Global Systemically
Important Insurer or 'G-SII'; the impact of competition, economic
uncertainty, inflation and deflation; the effect on Prudential's
business and results from, in particular, mortality and morbidity
trends, lapse rates and policy renewal rates; the timing, impact
and other uncertainties of future acquisitions or combinations
within relevant industries; the impact of internal projects and
other strategic actions failing to meet their objectives; the
impact of changes in capital, solvency standards, accounting
standards or relevant regulatory frameworks, and tax and other
legislation and regulations in the jurisdictions in which
Prudential and its affiliates operate; and the impact of legal and
regulatory actions, investigations and disputes. These and other
important factors may, for example, result in changes to
assumptions used for determining results of operations or
re-estimations of reserves for future policy benefits. Further
discussion of these and other important factors that could cause
Prudential's actual future financial condition or performance or
other indicated results to differ, possibly materially, from those
anticipated in Prudential's forward-looking statements can be found
under the 'Risk Factors' heading in its most recent Annual Report
and the 'Risk Factors' heading of Prudential's most recent annual
report on Form 20-F filed with the U.S. Securities and Exchange
Commission, as well as under the 'Risk Factors' heading of any
subsequent Prudential Half Year Financial Report. Prudential's most
recent Annual Report, Form 20-F and any subsequent Half Year
Financial Report are available on its website at
www.prudential.co.uk.
Any forward-looking statements contained in this document speak
only as of the date on which they are made. Prudential expressly
disclaims any obligation to update any of the forward-looking
statements contained in this document or any other forward-looking
statements it may make, whether as a result of future events, new
information or otherwise except as required pursuant to the UK
Prospectus Rules, the UK Listing Rules, the UK Disclosure and
Transparency Rules, the Hong Kong Listing Rules, the SGX-ST listing
rules or other applicable laws and regulations.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: 16
November 2017
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PRUDENTIAL
PUBLIC LIMITED COMPANY
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By: /s/
Mark FitzPatrick
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Mark
FitzPatrick
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Chief
Financial Officer
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