Prudential’s profits surged by 39 per cent in the first half of this year despite the restructuring of its UK arm which resulted in sales falling by a fifth.
Interim profits were £2.08bn compared with £1.47bn in the first half of 2006.
New business premiums for the group rose by 12 per cent on an annual premium equivalent basis to £1.33bn, driven by strong performance in Asia, but dropped from £138m to £108m in the UK.
Prudential retail life and pensions managing director Gary Shaughnessy says the drop in UK sales is a “simple timing issue” reflecting a slowdown in bulk annuity sales and a greater focus on more profitable business lines. He says this will balance out in the fourth quarter when the £1.7bn Equitable Life bulk annuity deal is due to be completed.
In the UK, operating profits rose from £436m to £602m. Individual annuity sales in the UK rose from £114m to £140m. Corporate pension business grew to £53m from £36m.
Record sales at investment arm M&G saw profits leap to £140m from £100m.
Shaughnessy says: “The corporate pension market has been incredibly aggressive. They are fighting for scale. We have really focused on being very selective. In fact, we have declined far more cases than we tendered for.”
Prudential has won big corporate pension schemes with Rolls-Royce, American Express, Birds Eye and Debenhams. The company has also signed a five-year deal with Barclays to provide conventional annuity products to its customers.