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, 2018
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-
14 November 2018
Prudential plc investor conference and business performance
update
Prudential plc ("Prudential") is holding a conference for investors
and analysts in Singapore on 14-15 November 2018.
The presentations will focus on Prudential's Asia businesses, which
are central to the Group's long-term growth ambitions, both today
and post-demerger of M&G Prudential, our savings and investment
business in the UK and Europe. There will also be a Group update on
strategy, the M&G Prudential demerger process and new business
performance, alongside presentations from Jackson, our US business,
and M&G Prudential.
Mike Wells, Group Chief Executive, said: "Since our last Asia-based
investor conference in 2014, our Asia business has more than
doubled new business profit1,
demonstrating our ability to capture high-quality growth at
pace.
"As we look ahead post-demerger, the profitable growth prospects of
our Asia businesses remain substantial, given the increasing
protection and savings needs of our customers and the extent of the
footprint we have established.
"I look forward to showcasing the breadth of our capabilities and
the reach of all of our businesses, which underpin my confidence in
the ability of Prudential and M&G Prudential to capture the
structural opportunities ahead and to continue to deliver for the
benefit of all our stakeholders."
Business performance update2
Over the first nine months of 2018, the Group's life insurance new
business profit3 increased
by 17 per cent (12 per cent on an actual exchange rate basis),
reflecting the strength and diversity of the Group's positioning
and our continued focus on high-quality new business sales,
together with the benefit of pricing actions and more favourable
economics in the period.
In Asia,
our performance continues to be driven by our strategic focus on
recurring premium, health and protection business. In the first
nine months, new business profit increased by 15 per cent (9 per
cent on an actual exchange rate basis) to £1,762 million, with
a 19 per cent increase in health and protection new business
profit. This performance remains broad-based, with double-digit
growth in seven markets4,
and across both our agency and bancassurance channels. While APE
sales in the first nine months were unchanged compared to the same
period in 2017, the year-on-year growth rate was 9 per cent in the
discrete third quarter and included record third quarter sales in
seven markets.
In asset management, Eastspring total funds under management
increased to £149.2 billion5 (31
December 2017: £138.9 billion6),
reflecting continued internal net flows from our life businesses
and the additional funds from the acquisition of TMB Asset
Management in Thailand. External net outflows were £2.0
billion7 in
the year to date, resulting from institutional bond fund
redemptions and the impact of market volatility on retail gross
flows. On 23 October 2018, Eastspring announced it had successfully
registered Eastspring Investment Management (Shanghai) Company
Limited, Eastspring's wholly foreign owned enterprise, as a private
fund manager with the Asset Management Association of China,
providing a foundation for long-term development of the business in
China.
In the US, Jackson's new business profit increased 22 per
cent (16 per cent on an actual exchange rate basis) to £716
million in the first nine months, primarily reflecting the benefit
of higher interest rates and tax reform. Variable annuity APE
sales, excluding Elite Access, were up 1 per cent compared with the
same period last year. Separate account assets are up 5 per cent
year-to-date to $185.3 billion (31 December 2017: $176.6 billion),
driven by positive net flows and favourable market
movements.
M&G Prudential has seen continued demand for
PruFund-backed products, leading to an 18 per cent increase in new
business profit to £277 million, with APE sales up 6 per cent.
PruFund net inflows of £6.6 billion in the first nine months
contributed to PruFund funds under management of £42.9
billion, 19 per cent higher than at the start of the year. In asset
management, external net outflows of £5.6 billion in the first
nine months (2017: net inflows £9.9 billion) included outflows
of £6.1 billion from the redemption of a single large, but
low-margin, institutional mandate. External funds under management
were £157.4 billion at 30 September 2018 (31 December 2017:
£163.9 billion), with M&G Prudential total funds under
management of £334.4 billion8 (31
December 2017: £350.7 billion8).
The estimated Group shareholder Solvency II
surplus9,10 at
30 September 2018, after payment of the first interim dividend, was
£14.1 billion, equivalent to a shareholder cover
ratio9,10 of
205 per cent (31 December 2017: £13.3 billion, equivalent to a
shareholder cover ratio9 of
202 per cent).
We continue to make good progress on the actions needed for the
demerger of M&G Prudential from the Group. On 1 October 2018,
we announced the appointment of Mike Evans as Chair of M&G
Prudential. In addition, in October 2018, as part of the process
required before demerger to rebalance debt across M&G
Prudential and Prudential, the Group issued substitutable
subordinated debt, in three tranches totalling a sterling
equivalent of £1.6 billion.
Outlook
Our strategy remains focused on the clear structural opportunities
in each of our key markets. The planned demerger of M&G
Prudential is on track, and demonstrates our commitment to creating
shareholder value. 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
Comparison is made between the 2018 half year and 2014 half year
results, excluding the sold Korea business, on a constant exchange
rate basis.
2
Comparisons are to the first nine months of the prior year unless
otherwise stated and year-on-year percentage changes are stated on
a constant exchange rate basis unless otherwise
stated.
3
New business profit on business sold in the period, calculated in
accordance with EEV principles as defined in our Annual
Report.
4
Excludes Laos where amounts are immaterial.
5
Includes those from Asia Money Market Funds and assets managed for
internal life operations.
6
As reported (on an actual exchange rate basis).
7
Excludes Asia Money Market Fund investment flows.
8
Total assets managed by M&G Prudential include internal
insurance funds of £177 billion (31 December 2017: £187
billion), including PruFund-backed products.
9 The
Group shareholder capital position excludes 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 management's calculation of UK
transitional measures reflecting operating and market conditions at
each valuation date.
10
Excludes the beneficial impact of the £1.6 billion
sterling equivalent subordinated debt raised in October
2018.
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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Tom
Willetts
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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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William
Elderkin
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+44
(0)20 3480 5590
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Notes to Editors:
Investor conference
The investor conference is available to view via live webcast from
08.30 Singapore time (UK time: 00:30) 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: https://www.investis-live.com/prudential/5ba8ff4ea2d81c0a0039925f/ybdd
Agenda
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Time (Singapore time)
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Topic
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Speaker
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Wednesday 14 November
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From 07.30
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Registration
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08.30 -
09.00
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Group
strategic overview
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Mike
Wells
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09.00 -
09.30
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Group
financial update
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Mark
FitzPatrick
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09.30 -
10.15
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Asia
strategic overview
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Nic
Nicandrou
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10.15 - 10.45
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Break
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10.45 -
11.30
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Asia
insurance
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Lilian
Ng
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11.30 -
12.15
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Eastspring
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Guy
Strapp
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12.15 - 13.15
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Lunch
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13.15 -
16.15
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Asia
innovation and partnership
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Nic
Nicandrou, Dr Ali Parsa, Asia management
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16.15 - 16.45
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Break
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16.45 -
17.30
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Asia
financial update
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Raghu
Hariharan
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17.30 -
18.15
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Asia
Q&A
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Asia
management
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Thursday 15 November
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08.00 -
08.10
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US
introduction
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Barry
Stowe
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08.10 -
08.30
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US risk
management
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Brad
Harris
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08.30 -
09.10
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US
pricing and ALM
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Steve
Binioris
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09.10 - 09.25
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Break
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09.25 -
10.05
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US
economics and capital
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Chad
Myers
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10.05 -
10.30
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US
strategic outlook
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Barry
Stowe
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10.30 -
11.15
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US
Q&A
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US
management
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11.15 - 11.30
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Break
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11.30 -
12.45
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M&G
Prudential
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John
Foley, Clare Bousfield
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12.45 -
13.30
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Group
Q&A
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Mike
Wells and Group management
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13.30 - 14.30
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Lunch
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14.30 -
17.30
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Singapore office
visit
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New business performance Q3 year to
date
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Actual Exchange Rate
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Constant Exchange Rate
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Q3 2018 £m
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Q3 2017 £m
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Change %
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Q3 2017 £m
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Change %
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APE Sales
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New Business Profit
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APE Sales
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New Business Profit
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APE Sales
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New Business Profit
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APE Sales
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New Business Profit
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APE Sales
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New Business Profit
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Asia
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2,647
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1,762
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2,788
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1,616
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(5)%
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9%
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2,651
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1,531
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0%
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15%
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US
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1,179
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716
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1,301
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619
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(9)%
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16%
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1,228
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586
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(4)%
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22%
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M&G Prudential
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1,148
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277
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1,085
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234
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6%
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18%
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1,085
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234
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6%
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18%
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Total Group
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4,974
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2,755
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5,174
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2,469
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(4)%
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12%
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4,964
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2,351
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0%
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17%
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M&G Prudential and Eastspring external funds under
management
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2018 £m
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2017 £m
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Actual Exchange Rate
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Actual Exchange Rate
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At
1 Jan 2018
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Net
flows
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Market and other movements
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At
30 Sep 2018
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At
1 Jan 2017
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Net
flows
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Market and other
movements
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At
30 Sep 2017
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M&G Prudential Wholesale and Direct
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79,697
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147
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(744)
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79,100
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64,209
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7,770
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2,724
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74,703
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M&G Prudential Institutional
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84,158
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(5,707)
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(113)
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78,338
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72,554
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2,172
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4,039
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78,765
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Total M&G Prudential1
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163,855
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(5,560)
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(857)
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157,438
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136,763
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9,942
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6,763
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153,468
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Eastspring2
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46,568
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(2,000)
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5,196
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49,764
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38,042
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2,830
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3,467
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44,339
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Total
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210,423
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(7,560)
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4,339
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207,202
|
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174,805
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12,772
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10,230
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197,807
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|
1
|
The
results exclude the contribution from PruFund products (net inflows
of £6.6 billion in the first nine months of 2018; funds under
management of £42.9 billion at 30 September 2018, £35.9
billion at 31 December 2017). Total funds under management
including internal life operations were £334.4 billion at 30
September 2018, £350.7 billion at 31 December
2017.
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2
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The
results exclude the contribution from internal life operations and
Asia Money Market Funds (net inflows of £5.7 billion in the
first nine months of 2018). Total funds under management including
internal life operations and Asia Money Market Funds were
£149.2 billion at 30 September 2018, £138.9 billion at 31
December 2017.
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Financial calendar
2018 full-year results: 13 March 2019
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 2017 unless
otherwise indicated.
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Average Rate*
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Closing Rate
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Local Currency : £
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Q3 2018
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Q3 2017
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% Change**
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30 Sep 2018
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30 Sep 2017
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% Change**
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China
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8.80
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8.68
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(1)%
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8.97
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8.91
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(1)%
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Hong Kong
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10.60
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9.94
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(6)%
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10.20
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10.48
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3%
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Indonesia
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18,971.19
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17,013.41
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(10)%
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19,432.30
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18,070.69
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(7)%
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Malaysia
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5.39
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5.54
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3%
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5.40
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5.67
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5%
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Singapore
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1.81
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1.77
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(2)%
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1.78
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1.82
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2%
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US
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1.35
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1.28
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(5)%
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1.30
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1.34
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3%
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*
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:
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Risk discount rate %
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Government bond yield1 %
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|
|
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30 Sep 2018
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30 Sep 2017
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30 Sep 2018
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30 Sep 2017
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Asia operations:
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China
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9.4
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9.4
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3.7
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3.7
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Hong Kong2
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4.4
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3.6
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3.1
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2.3
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|
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Indonesia
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12.5
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10.9
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8.3
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6.6
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Malaysia
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6.7
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6.9
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4.1
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4.0
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Singapore
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3.8
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3.8
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2.5
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2.2
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US operations: Variable
Annuity3
|
7.5
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6.7
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3.1
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2.3
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UK operations:4
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4.9
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4.8
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1.8
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1.8
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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 operations, the assumptions are for local
currency-denominated business.
3
For US operations the pre-tax expected long-term nominal rate of
return for US equities was 7.1 per cent at 30 September 2018 and
6.3 per cent at 30 September 2017.
4 For
UK operations, 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 2018 has been prepared on
a consistent basis with that set out in the 2018 Half Year
Financial Report under 'Additional Financial Information' Section
II (f), which should be read in conjunction with the 'Risk Factors'
also set out in the 2018 Half Year Financial Report.
About Prudential plc
Prudential plc and its affiliated companies constitute one of the
world's leading financial services groups, serving over 26 million
customers, with £664 billion of assets under management (as at
30 June 2018). 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, the
timing, costs and successful implementation of the demerger of the
M&G Prudential business; the future trading value of the shares
of Prudential plc and the trading value and liquidity of the shares
of the to-be-listed M&G Prudential business following such
demerger; 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; disruption to the availability, confidentiality
or integrity of Prudential's IT systems (or those of its
suppliers); 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: 14
November 2018
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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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