Prudential has posted a 10 per cent rise in UK profits despite individual annuity sales falling by 43 per cent in the wake of the Budget.
According to the firm’s half year results, published this morning, Prudential’s UK arm made a £374m profit during the first six months of 2014, up 10 per cent from £341m in the same period last year.
UK sales rose 22 per cent from £355m in the first half of last year to £433m this year.
However, while four new bulk annuity deal brought in total income of £104m, year-on-year individual annuity sales have fallen 43 per cent from £111m to £63m. The firm says income drawdown sales have risen 95 per cent during the period.
Corporate pensions sales were down 15 per cent, from £93m last year to £79m.
Prudential Group chief executive Tidjane Thiam says: “In this uncertain new regulatory landscape, we focused on developing existing product propositions to meet customers’ evolving needs.
“our UK team was able to complete sales of £104m of bulk annuity transactions above our hurdle rate – there were no bulk annuity transactions in the first half of 2013 – and to significantly increase sales of with-profits bonds by 25 per cent as retail annuity sales decreased by 43 per cent.”
The UK performance compares with a 7 per cent rise in profits for the firm globally, from £1.4bn in the first half of 2013 to £1.5bn in the first six months of this year. New business was up 6 per cent across the group, from £2.1bn to £2.3bn.