This is despite Prudential’s investment arm, M&G, receiving total net inflows of £2.5bn during the first quarter, up 400 per cent on Q1 2008 of £600m.
Sales of with-profits bonds increased 72 per cent on an APE basis compared with the first quarter of 2008, to £31m.
The firm says impressive with-profits sales offset a reduction in sales of individual annuities of 6 per cent, offshore bonds of 63 per cent and corporate pensions of 11 per cent.
But Prudential’s internal vestings book increased by 22 per cent in Q1 to APE £39m, while external sales dropped 37 per cent.
The firm posted a IGD capital surplus of £2bn which includes £400m raised from a hybrid debt placement earlier this month.
Prudential maintained its credit reserve at £1.4bn to back its UK shareholder-backed annuity fund against future defaults. The firm suffered defaults of £11m in the first quarter.
New business sales in Asia dropped 11 per cent compared to Q1 2008, while sales in the US increased by 12 per cent.
Group Chief Executive Mark Tucker says: “These sales results demonstrate our ability to focus the business on the most profitable opportunities across our international spread of operations, in response to changes in market conditions – a very positive indicator.
“Our emphasis on maintaining the Group’s financial strength through capital conservation and cash generation has ensured that our IGD position remains robust.
“Our retirement focussed strategy, advantaged international spread and operational excellence give us confidence that we will continue our record of out-performance over the cycle.”