Prudential Results Benefit From Asia Push as Profit Up 25%By
Insurer names Deloitte’s Mark FitzPatrick as its new CFO
Firm aims to have doubled Asian operating profit by year-end
Prudential Plc said first-quarter earnings more than doubled in China and rose by double digits in Hong Kong after the U.K.’s largest insurer recruited more agents in the region and increased its focus on health and protection sales.
A measure of future Asian profitability known as new business profit jumped by more than a quarter, contributing to a 25 percent gain across the firm as a whole, the London-based company said in a statement Thursday. Higher interest rates also boosted earnings.
Chief Executive Officer Mike Wells is betting on Asia as he pursues an international expansion strategy that seeks to increase the insurer’s dividend by 5 percent each year and double operating profit in the region for the five years through 2017. Prudential named Deloitte U.K.’s Mark FitzPatrick as its new chief financial officer, replacing Nic Nicandrou, who becomes head of its Asian unit.
“Whilst we view the trading update as very positive, we were slightly surprised about the change in senior management coming so soon after the last round of changes,” Panmure Gordon & Co. analyst Barrie Cornes wrote in a client note.
Asian new business profit, a measure of future profitability calculated by discounting the present value of future profits, advanced 26 percent in the first quarter to 561 million pounds ($732 million). The figure for the company as a whole rose to 856 million pounds.
Prudential’s asset-management unit, which includes M&G and Eastspring, saw external net inflows of 5.7 billion ponds in the quarter. The company estimated its shareholder Solvency II ratio at 198 percent as of the end of March, slightly worse than the 201 percent figure at the end of last year.
In other personnel changes, Tony Wilkey, the Asian unit’s current CEO, will step down in July and leave the group’s board of directors. U.K. insurer Prudential has no relation to Newark, New Jersey-based Prudential Financial Inc.