Prudential’s first-half profit up 9% on Singapore growth, but onshore China business remains weak

HONG KONG - Prudential on Aug 28 reported a 9 per cent rise in first-half operating profit, backed by strong policy sales in Singapore, but a slowdown in business in China and Indonesia weighed on overall growth.

The London and Hong Kong dual-listed company posted operating profit of US$1.54 billion (S$2 billion) for the first six months on a constant exchange rate basis, up from US$1.46 billion in the same period the previous year.

The annual premium equivalent (APE) sales – a sales volume gauge – of its Singapore operation grew by 17 per cent to US$450 million in the first six months from the same period a year ago, with the city-state replacing China onshore to become Prudential’s second-largest new sales market.

Top market Hong Kong saw a 7 per cent drop in APE sales to US$955 million, largely due to a high base from a year ago, when volume surged on pent-up demand from Chinese visitors buying insurance in Hong Kong after the pandemic.

In Indonesia, APE sales dropped by 25 per cent to US$107 million during the period from a year ago.

The APE sales of its China onshore joint venture Citic-prudential Life Insurance dropped by 15 per cent to US$324 million in the first half compared with a year ago.

The weak sales came after Prudential and Citic, which each owns 50 per cent of the unit, injected 2.5 billion yuan (S$457 million) in cash in December 2023.

The performance “was achieved having taken steps to reposition our business in the Chinese mainland ahead of both regulatory and macroeconomic changes”, chief executive Anil Wadhwani said in a statement. He did not give details.

The weak growth in the Chinese mainland and concerns around its property sector continue to put downward pressure on interest rates, a factor that could also weigh on the broader Asian region as well as the global economy’s vitality, the insurer said in the statement. REUTERS