Prudential, the leading life insurer in Asia and Africa, reported a strong growth in its new business profit for the first nine months of 2023, driven by its diversified product portfolio and distribution channels across its markets.
Hong Kong leads the growth with increased demand from Chinese Mainland visitors
Prudential’s new business profit increased by 37% to $2.14 billion, in the nine months to September. This growth continued into the third quarter (Q3). Excluding economic impacts, new business profit increased by 48%, with improved margins attributed to positive developments in channel and geographic mix.
Year-to-date APE sales rose by 40% to $4.42 billion, led by Hong Kong, with increased sales to both Chinese Mainland visitors and domestic customers compared with the same period last year. Health and protection products contributed to 37% of the total new business profit.
APE sales through the agency channel increased by 81%, with new business profits up 62% compared to the previous year, despite interest rate movements. APE sales through the bancassurance channel increased by 3%, primarily due to new products and bank partners in Taiwan, improved performance in Malaysia, and the success of multi-currency savings products in Hong Kong.
However, sales through the Chinese Mainland bancassurance channel faced headwinds, and consumer sentiment in Vietnam declined. APE sales to Chinese Mainland visitors were approximately 1.3 times higher than in 2019.
ASEAN markets show resilience amid pandemic challenges
Several of Prudential’s ASEAN-based businesses have seen double-digit growth in new business profit for the first nine months of 2023. Indonesia and Malaysia experienced continued momentum in APE sales and new business profits. In Indonesia, the impact of product repricing and upgrades seen in the first half of 2023 moderated in the third quarter, but overall new business profit growth remained strong. In Malaysia, actions to improve productivity led to consistent growth in productivity throughout the year.
In Singapore, APE sales increased year-on-year in the third quarter, supported by a rebound in the bancassurance channel. Total new business profits for the first nine months were lower than the previous year due to the impact of higher interest rates in the first half.
Chinese Mainland undergoes industry-wide changes in product and distribution regulations
In the Chinese Mainland, the industry-wide changes in both product and bancassurance distribution regulations and Prudential’s pro-active actions to diversify product mix are leading to some disruption in sales. However, these changes are expected to be beneficial to the development of the domestic industry by increasing the role for insurance to meet customer needs and providing continuing demand for long-term savings and health and protection products.
At CITIC Prudential Life (CPL), Prudential’s joint venture in the Chinese Mainland, APE sales declined during the first nine months, especially in the third quarter due to revisions in products required by regulatory changes. However, new business profit in the agency channel grew, offset by a decline in the bancassurance channel. Both channels saw improved new business margins in the third quarter, driven by a shift towards health and protection products.
Prudential focuses on executing its five-year strategy to enhance operational efficiency and productivity
Prudential’s CEO Anil Wadhwani said: “The new business momentum we saw in the first half of 2023 continued in the third quarter. The strength of our distribution capabilities and the diversification of the business across markets, products and channels drove our performance in the nine months to 30 September 2023, with fifteen of our life markets across Asia and Africa delivering double-digit growth in new business profit.”
He added: “We are focused on the execution of our recently announced five-year strategy designed to enhance the Group’s operational efficiency and increase the productivity of our agency and bank distribution channels. We continue to build our core capabilities across our strategic pillars of Customer, Distribution and Health and supporting enablers including Technology. In this regard we have recently appointed Ashley Veasey as our new Chief Information Technology Officer, reflecting the importance of technology and innovation in enhancing our customer and distribution experiences”.
