Prudential's UK sales fall
Thursday, 19 Apr 2007 11:21
Mark Tucker says Prudential have made an "excellent start" to 2007
Prudential has revealed a slight increase in first quarter sales, with strong performances by the insurer in the US and Asian markets compensating for disappointing figures for the UK.
Britain's second-largest insurer revealed that new business sales reached £640 million during the first three months of 2007.
The figure represents growth of eight per cent based on constant exchange rates, but when the effect of the weak dollar is taken into account sales are up by just one per cent.
In the UK sales dropped 23 per cent to £183 million in the first quarter, with the business hit by the end of a single bulk annuity deal and a second distribution agreement with Lloyds TSB which helped boost sales in 2006.
Nonetheless, Prudential said that sales of its pension products had lifted by 29 per cent to £125 million compared to the same period in 2006, with the promising result reflecting "strong growth" in individual annuities, corporate pensions, equity release schemes and with-profit bonds.
The company also announced a new deal with high street chemist Boots to sell its private medical insurance through the retailer's high street stores.
However, it is in the US and Asia that the insurer is achieving its highest growth, with its American insurance business Jackson recording a 21 per cent increase in sales to £180 million, on an annual premium equivalent (APE) basis.
In Asia, sales were up 23 per cent to £277 million, with strong trading in China, Japan and India boosting Prudential's performance in the market.
Despite the underwhelming UK results, Prudential chief executive Mark Tucker insisted the group had made an "excellent start" to the year.
"We continue to see excellent prospects across the group and we will pursue these opportunities aggressively with a clear focus on value creation," he said in a statement announcing the results.
Prudential announced in March that 3,000 jobs were under review by the insurer as part of a planned restructuring programme which includes an increase in the group's cost-cutting target for the UK.