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Prudential Singapore new sales, VNB premiums fall (Amended)

Singapore

THE end of British-based insurer Prudential's distribution relationships with Maybank and SingPost has continued to weigh on its total new business sales in Singapore, even as new business profit for fiscal year 2015 went up.

Coupled with a "pro-active de-emphasis of universal life sales", the insurer's total annual premium equivalent (APE) - a measure of new business sales - fell 13.4 per cent to £309 million (S$607.8 million) in 2015.

"During 2015, we have focused on growing regular premium agency-sourced protection sales, which has enhanced the mix of business and contributed to a 7 per cent increase in new business profit through this channel," the group said in a filing to the Singapore Exchange on Wednesday.

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For the full year, present value of new business (VNB) premiums, calculated as single premiums plus the present value of expected premiums of new regular premium business, fell 16.9 per cent to £2.23 billion. Single premiums fell 32.9 per cent to £454 million, while regular premiums dropped 8.7 per cent to £264 million.  

Even as regular premiums recorded fell, the insurer said it continues to lead the market for regular premium products with a market share of 23 per cent. It also has the largest agency force here, overtaking rival AIA Singapore, whom observers said has held the spot for a long time.

On the group level, Prudential posted an 11.1 per cent drop in after-tax profit attributable to shareholders to £3.95 billion in 2015, on a constant exchange rate basis. It declared a full-year dividend of 38.78 pence a share, up 5 per cent, and also announced a special dividend of 10 pence a share.

Group operating profit rose 21.8 per cent to £4.01 billion, lifted by growth of its long-term businesses in Asia, the United States and the United Kingdom. Lifted by Asia business, new business profit climbed 20.3 per cent to £2.62 billion, while APE sales for the year grew 17.4 per cent to £5.61 billion in 2015.

Mike Wells, the group's chief executive, said the insurer continued to grow across its key metrics, despite the macroeconomic uncertainty and challenges presented by low long-term interest rates. He noted the results "represent good progress towards the 2017 growth and cash objectives", set out in December 2013.

The story above is the correct version.

Note: The present VNB premiums is calculated as equalling single premiums plus the present value of expected premiums of new regular premium business, and not the embedded value of new insurance contracts written in the year as previously stated.

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