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Pru’s UK profits dip 9% as annuity sales fall

Prudential’s UK arm saw a 9 per cent fall in operating profits on an EEV basis, from £982m to £893m, for 2011 as annuity sales decreased.  

On an IFRS basis operating profits were up 1 per cent, from £719m to £723m.

Sales of individual annuities fell 13 per cent to £179m APE and sales of external annuities fell 30 per cent to £57m APE, due to the end of a single-tie deal with Zurich.

Onshore bond sales increased 7 per cent to £178m APE, with £160m of these with-profit bond sales, while corporate pension sales were 5 per cent higher at £233m APE.

Individual pension sales increased 4 per cent to £72m APE while sales of the provider’s RDR-compliant flexible retirement plan increased 20 per cent to £27m APE.

The results highlight the launch of the provider’s new 25-strong direct advice service, Prudential Financial Planning, which offers financial advice to customers coming up to retirement who came from Pru’s old direct sales force.

Group chief executive Tidjane Thiam says: “Our performance in 2011 shows we continue to be a market leader both in individual annuities and in with-profits products. In individual annuities, we registered a decrease in our sales as we continued to proactively control capital consumption.”

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