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Pru is optimistic despite profit fall

Prudential suffered a 15 per cent fall in group profits in the first half of 2002 despite its UK intermediary business growing by 5 per cent from £222m to £233m equivalent premium income.

Group profits were down from £377m last year to £332m, due partly to a £146m loss from investing in US bonds.

Although Pru&#39s free-asset ratio is down from 12.2 per cent a year ago to 11 per cent at June 30, 2002, it is still financially stronger than many other life companies. Pru&#39s life fund now has 51 per cent in equities with the remainder in other asset classes.

Fund management subsidiary M&G saw sales rise by 7 per cent from £579m to £620m.

Prudential chief executive Jonathon Bloomer says: “Earlier this month we saw the publication of the Sandler review into UK retail savings and the Pickering report.

“We urge the Government to align these and the other reviews currently being und-ertaken and to work closely with the regulators and industry to create a single package of measures to help reduce the savings gap.

“We believe that there will be enormous opportunities for the bigger companies such as Prudential with financial strength, a strong brand, economies of scale, low cost bases and a diversified product and distribution offering.

“The strategy that we set out for our UK insurance business last year means that we are ideally positioned, particularly as customers place an increasing emphasis on financial strength and trusted brands when making decisions about their long-term savings and investments.”

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