Pru plc reported strong sales in the first quarter of 2023 (1Q23), with its annualized premium equivalent (APE) jumping 35% from $1,212 million in 1Q22 to $1,559 million in 1Q23.
The increase was driven by increased cross-border traffic between China and Hong Kong, stronger domestic demand in Hong Kong and the recovery of other business units, said Mr. Pramod Shenoi, co-director of Asia-Pacific Research, and Mr. Trung Tran, analyst. – APAC Insurance, at CreditSights, in a comment. CreditSights is a division of the Fitch Group.
While COVID-19-related social restrictions have been phased out, Pru plc’s agency channel has maintained its growth momentum, with APE sales increasing quarterly since mid-2022. While APE sales through the bancassurance channel declined by 4%, it should be noted that the company recorded a double-digit growth rate for this channel in the previous year. Overall, with stronger sales and a stable new business margin (48%), the company reported higher total new business profit, which increased by 30%.
hong kong
Continuing the growth momentum gained in the second half of 2022, Hong Kong APE became the largest single market contributor to group sales growth in 1Q23. This was attributed to improved sales to domestic customers and visitors from mainland China, particularly after Hong Kong reopened its border in February 2023, leading to an increase in inbound visitors from mainland China.
As a result, new business profit in Hong Kong more than doubled to $293 million, while APE sales tripled to $455 million, accounting for 28.5% of group APE. However, Hong Kong business new business profit margin was 64% in 1Q23, compared to 74% in FY22 and 134% in FY21, a downward trend driven by a shift to products savings.
Mainland China
In China, total new business profit increased despite an overall decline in APE sales. Although CITIC-Prudential Life’s bancassurance channel recorded negative growth, agency channel APE sales increased and thus contributed to higher overall profit on new business. This is because the agency channel’s profit margin on new business (65% in FY22) was generally much better than that of the bancassurance channel (43% in FY22) . CITIC–Prudential Life I50-50 joint venture between the public investment company CITIC and the Pru Group.
South East Asia
APE sales in Southeast Asia presented a mixed picture. While Singapore and Malaysia saw moderating APE sales and growth in new business earnings, Indonesia and Growth Markets (particularly Thailand and the Philippines) performed well. Overall, this region contributed about one-third of the group’s total new business profit in the quarter. Meanwhile, ICICI Prudential Life continued to grow strongly in 1Q23 with double-digit growth in APE sales and new business profits. ICICI Prudential Life, which is listed in India, is a life insurance joint venture between ICICI Bank and the Pru Group.
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Pru plc key financial summary
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1Q2023
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1Q2022
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Annual change
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Profit from new ventures (millions of US dollars)
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743
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591
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25.7%
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New Business Margin (APE) %
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47.7%
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48.8%
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-1.1ppt
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Annualized premium equivalent (APE) (US$ millions)
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1,559
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1,212
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28.6%
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Source: Company Data, CreditSights
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